The dynamic response of a dam is the combined effect of the interaction of dam, reservoir, and foundation systems. The profile of the Koyna Dam has been adopted for the study of the investigation of the dam-reservoir-foundation system. A concrete damaged plasticity model has been used to take nonlinearity into account. Tensile damage in the Koyna Dam body has been simulated for the Koyna earthquake (1967) motion. Influence of reservoir and foundation material on the dynamic response of a concrete gravity dam has been studied by varying the height of the reservoir and foundation modulus value. Study has also been carried out considering water cavitation to obtain its influence on the nonlinear dynamic response of the concrete gravity dam.