A simplified approach is presented for the analysis of the settlement of vertically loaded pile groups. In order to simulate the nonlinear pile-to-pile interaction in pile groups, the soils along the piles are assumed to behave as a series of nonlinear springs subjected to the shaft shear stress at the pile/soil interface. Considering the displacement reduction induced by the pile-to-pile interaction, the shear-deformation method is adopted to approximate the displacement field of the layered soils around the piles, and the equivalent stiffness of the springs is obtained. Furthermore, the load−settlement response of pile groups is deduced by modifying the load-transfer functions to account for the pile-to-pile interaction. The settlements of a laboratory pile groups computed by the presented approach are in a good agreement with measured results. The analysis on contrastive parameters shows that the settlements of pile group decrease with the increase of the pile space and pile length, and the part of piles exceeding the critical pile length has little contribution to the bearing capacity of the pile groups.