The application of finite element method to the analysis of discontinuous structural systems had received a considerable interest in recent years. This study presents a finite element analysis technique used in analyzing discontinuous system subjected to static, dynamic, or seismic loading. The discontinuities were modelling by using thin layer interface elements designed to simulate the actual behavior at the interfaces between contacting materials. Nonlinear elasto-plastic constitutive models of the thin layer interface elements are evolved to trace different modes of deformations along discontinuities and soil-structure contact. As an application, the response of the 76.8 m high Kinta RCC dam, located in Malaysia was analyzed under static and dynamic loads. Time domain analysis using nonlinear contact elements located at the dam-foundation interface have been used to determine the dynamic modes of deformation of the thin layer interface, debonding, slip and crushing of the interface to evaluate the overall stability of the dam. A nonlinear dynamic analysis is carried out in time domain utilizing Newmark method considering gravity, and earthquake loading. In the dynamic analysis the response of the dam is investigated with respect to horizontal ground motion with peak acceleration of 0.27g. The analysis is performed with the aim to predict the response of RCC dam and the contact area along dam-foundation interface in term of displacement, stress, and acceleration which was essential for the safety and stability of the dam during the normal operation and during possible earthquake loading condition. The numerical results show that nonlinear elasto-plastic modelling of the dam-foundation interface reduces the seismic response of the system, indicating the possibility of more rational and economical designs. © 2006 Civil-Comp Press.