The 17 January 1995 Hyogo-ken Nanbu earthquake is a typical example showing that the ground motions along basin-edge faults can be very destructive. In this study, we simulate the near-fault ground motion from this earthquake based on a kinematic fault model and a simplified 3D velocity structure of the Kobe area. The kinematic earthquake rupture and the wave propagation are modeled using a 3D finite-difference method (FDM). Our simulation identifies the basin-edge effect as an important factor that influenced the ground-motion amplification pattern in the Kobe area. We found that the coupling of the source directivity and basin-edge effects causes impulsive ground motions with extremely high amplitude at periods greater than 1 sec and in a narrow zone offset less than 1 km from the basin edge. The combination of these effects acted to create a fairly continuous band of amplification that extends about 30 km in an elongated zone parallel to the basin-edge boundary. In some areas, localized site effects might have been as important as the abovementioned effects, but they cannot explain the continuity of the extended east-west zone of damage.