The Koyna earthquake (surface-wave magnitude 6.5) occurred on December 11, 1967 near Koyna Dam in a region of India which was considered to be stable and nearly nonseismic. The relationship between the recent increase in number of earthquake occurrences in the vicinity of Koyna Dam and the filling of the reservoir behind the dam is discussed. The response of the dam to the strong ground motion recorded during the Koyna earthquake is analyzed by the finite element method including dynamic effects of the reservoir. The cracking anticipated in the monoliths of Koyna Dam on the basis of stresses obtained from these analyses and strength of concrete in the dam is consistent with the earthquake damage. On the basis of analytical results, it would be useful to provide relatively higher strength concrete in selected parts of gravity dams; appropriate suggestions are made in this connection. Present design criteria need to be improved to recognize that significant tensile stresses occur in gravity dams during earthquakes and to provide for the consequences of these tensile stresses.