In this thesis, the dynamic response of concrete rectangular liquid storage tanks is investigated. In previous studies, the tank wall has been assumed as rigid in the calculation of hydrodynamic pressures. The effect of flexibility of tank wall is considered in this study. The analytical solutions for both impulsive pressure and convective pressure induced by both horizontal and vertical ground motions are presented.A 2-D coupled analysis model of tank wall is proposed. The hydrodynamic pressures are considered as external forces applied on the tank wall. Through a technique called the sequential method, the two fields of fluid and structure are coupled. The time-history analysis using the mode superposition method and the direct step-by-step integration method are carried out. Two rectangular tanks are analyzed. From the comparison of the results obtained from the proposed model with those proposed by other researchers, such as added mass model based on the rigid wall boundary condition, it shows that the lumped mass approach overestimates the base shear and wall displacement. The effect of wall flexibility on displacements, base shears and base moments are also discussed.A combination of the added mass method and the sequential method is used to study liquid storage tanks subjected to the vertical ground motion. It is found that the effect of the vertical acceleration should be considered in dynamic analysis of rectangular tanks. It is concluded that the total response of the structures should be based on the sum of the response under both horizontal and vertical components of ground motion.