Clear nonlinear behavior is analyzed from the acceleration records of the 1995 Hyogo-ken Nanbu earthquake at Port Island, Kobe. From four triaxial instruments placed at four different depths, the surficial effects during strong ground motions were compared with those during weak motions before and after the mainshock. We used a spectral ratio technique and a nonlinear inversion for velocity structure to analyze the data. From the spectral analysis, we observed a large variation of the spectral ratios between the surface and different depths during the strong ground motions and during the liquefied state. The spectral ratios after the mainshock (i.e., after the liquefied state) are different from those before the mainshock. The peak frequencies in the spectral ratios after the mainshock are shifted to lower frequencies with respect to those in the spectral ratios before the mainshock. We inverted the S-wave velocities using a genetic algorithm technique to determine the velocity structure before, during, and after the mainshock. The S-wave velocity structure before and after the mainshock was found to be different. Specifically, the S-wave velocity of the second layer (5 m to 16 m depth) after the mainshock was 20% lower than before. Our analysis shows that the liquefied state remains at least 3 hr after the mainshock but no more than 24 hr. The rigidity of the soil decreased close to zero when liquefaction happened and later increases gradually following a trend that resembles a consolidation curve. The strong influence of nonlinearity during the mainshock yielded a big reduction of the horizontal surface ground motions, so that the observed horizontal peak acceleration was only about 25% of the peak acceleration expected from the linear theory. However, the nonlinear effects in the vertical peak acceleration were not significant.