Parallel computing is becoming the strong trend of solving large scale geotechnical problems. A parallel preconditioned conjugate gradient iterative algorithm for finite element problems with coarse-mesh/fine-mesh formulation is discussed. An efficient preconditioner is derived from the multigrid stiffness matrix. The algorithm is implemented on a workstation cluster. Numerical example of solution of soils after the dynamic compaction is presented and the parallel performance is analyzed. The results show high speedup and efficiency. The algorithm is efficient for parallel computing.