<p>Accurate modelling of earthquake-induced liquefaction and soil–structure interaction remains a major challenge in geotechnical earthquake engineering, owing to the complex coupling between soil, pore water and structure responses under cyclic load. This study advances a fully coupled soil–water SPH approach by incorporating the SANISAND-Sf constitutive model and an explicit formulation for soil–structure interaction, enabling the simulation of liquefaction-induced large deformations and structural movements under seismic loading. The proposed SPH framework is first validated against the LEAP-2022 shaking table test of a sheet-pile wall, and subsequently applied to the Port Island quay wall failure during the 1995 Hyogoken-Nambu earthquake. Comparisons with experimental results and field observations confirm the approach’s ability to capture acceleration responses, excess pore water pressure evolution, and large deformation mechanisms of retaining structures. A parametric study further quantifies the influence of initial relative density on wall performance, revealing that liquefaction of the foundation soil beneath the structure predominantly governs wall displacements, while densification of this zone is markedly more effective than the backfill treatment. The results highlight the capacity of the proposed approach as a powerful tool for analysing soil–structure interaction and guiding seismic countermeasures for retaining systems in liquefiable ground.</p>