A hybrid finite element-boundary element formulation is developed for the nonlinear seismic analysis of 2D soil-structure systems that contain fully or partially saturated soils. The proposed formulation aims at combining the sophistication, versatility and nonlinear capabilities of the FEM with the ability of the BEM to model rigorously energy radiation. The FE part of the formulation is used to model the effective stress problem in the near field, incorporating all material and geometric nonlinearities. The BE part is used to model the infinite domain as an elastic medium, by considering strain-dependent equivalent linear properties. The new method is used in a series of analyses and reproductions of published results to verify its validity, demonstrate its versatility and attain more insight on select problems. The new formulation is applied on two different types of structures, with main objective to provide a better understanding of their seismic behavior. The first study is a reanalysis of the Lower San Fernando dam under the 1971 earthquake. The study reproduces remarkably many of the known behavior characteristics and the mode of failure of the dam. In a subsequent analysis aimed at demonstrating the effects of foundation flexibility, the original dam response is compared to the response assuming a hypothetical flexible foundation. The results demonstrate a substantial reduction in the response of the flexible foundation case. The second study examines the dynamic response of waterfront retaining walls. Emphasis is placed on the effects of relative density and stiffness of the backfill and foundation materials. As expected, the study shows that a wall with a dense backfill sand endures the dynamic loading with minimum permanent deformation, whereas a wall with loose backfill sand may experience excessive deformations and liquefaction. Significant deformation is also observed for the model with flexible foundation, despite the reduction of wave energy through radiation damping. The developed FE-BE formulation allows a deformation-based design of soil-structure systems by accounting rigorously for complex wave propagation phenomena and material nonlinearities.