Although tunnels were considered among the safest structures under earthquake loads, the recent studies have established that some effects have been observed in different tunnels and underground structures during and after ground shaking. As a result, it has become very important to perform engineering assessment for these special structures, from both geotechnical and structural engineering perspectives. The designer should check the safety of the underground structure to withstand adequately the different applied loads, considering seismic loads as well as the temporary and permanent static loads. The main goal of this research is to study the effect of introducing elastic soft material between a circular tunnel and the surrounding soil on seismic response. The study is performed by modeling the tunnel and the adjacent soil using the finite element method. The results of the analysis are discussed and the effect of seismic isolation on the performance and safety requirements for these vital structures is outlined.