Limited space has led to the construction of underground structures in urban areas to meet the increasing demands for residential, commercial and industrial areas. Deep excavation techniques are used to build underground metros, subways and basements, especially in congested areas. Retaining structures, such as diaphragm walls, contiguous pile walls and sheet pile walls, provide lateral support for the excavation. The finite element method is preferred as a design approach because it is capable of simulating backfill movement patterns, construction stages and impacts on nearby structures. The present study performs the numerical analysis of the diaphragm wall and its behavior under the effect of anchors which has been validated from the case study of deep excavation using PLAXIS 2D. A good agreement is found between both findings. The soil is represented in terms of the Mohr–Coulomb model, diaphragm walls are represented as plates, and the anchor rods are represented as node-to-node connections. The parametric study includes anchor inclination (5–35°), loading (0–50 kPa) and stiffness of the diaphragm wall. The analysis presents the behavior of the diaphragm wall represented in terms of horizontal wall displacement and stresses along the wall. Based on the behavior, the optimum angle of anchors was found to be 15⁰ to minimize the horizontal displacement of the wall. The significance of the wall thickness is from 0.6 to 1.2 m, and the magnitude of loading is emphasized in understanding diaphragm wall behavior and its effect on stresses.