Cyclic stress generated in soft foundation after cyclic wave loading is transferred to the intercalated soft layer through embankment and the backfilled sand layer. The strength of saturated soft clay degrades and soil loses bearing capacity. A 3D elasto-plastic dynamic model of steel sheet pile considering post-cyclic undrained strength degradation is developed using the dynamic finite element method. The maximum excess pore pressure and post-cyclic strength degradation of the intercalated soft layer are investigated. A method for dynamic stability analysis of steel sheet pile-soft foundation system is proposed to investigate the failure mode

stability and settlement of steel sheet pile-soft foundation system. The results show that the maximum excess pore pressure is generated in soft clay around the cell. Post-cyclic strength degradation occurs at the bottom of the main cell

arc cell and some soil-pile interaction areas. Safety factors of stability of steel sheet pile-soft foundation system decrease significantly with considering post-cyclic strength degradation of soft foundation. It is suggested that the post-cyclic strength degradation should be considered in practical design.