The Aratozawa dam, a 74.4 m-high central clay core rockfill dam, was located in the near-field of the 2008 Iwate-Miyagi Nairiku earthquake (MJ7.2). During the earthquake, acceleration exceeded 10 m/s2 at the bottom gallery, inducing large strain in excess of 10−3 and settlement of about 40 cm at the top of the core. The settlement is numerically analyzed by 2D-FEM, taking into account two factors. One is the decrease in the stiffness of dam materials, and the other is the decrease in arching action acting along the core-filter boundaries. The former was evaluated from observed earthquake responses of the dam, and the latter was expressed as a partial separation of the boundary. The numerical results showed a total settlement of about 37 cm at the top of the core, as well as a good agreement in vertical distribution of the core settlement with the observation at a differential settlement gauge.