Dynamic response and liquefaction potential of granular seabed around a rubble mound breakwater is investigated under waves. Dynamic response of the system is assumed to be governed by coupled Biot equations of poroelasticity. Mathematical formulations in terms of governing equations of partially-dynamic and quasi-static cases are considered. Dynamic response of seabed soil is analyzed using classical finite elements and a number of parametric studies are performed to draw a complete picture of the response of the system. Vertical displacement, shear stress and pore water pressure distributions are considered as the most representative variables defining the variations of response of the whole system and which are thus evaluated along some key cross sections around the breakwater. The results indicate that inertial terms associated with solid skeleton have almost no effect on the dynamic response and liquefaction potential. It was found that large amount of wave-induced shear stresses are taken by a relatively rigid core layer contributing to the breakwater stability where also the pore pressures dissipate significantly towards the seabed interface. Standing wave-induced instability of the system is also investigated in terms of instantaneous liquefaction based on the effective mean stress criterion. There is liquefaction observed at the seaward surface of the rubble whose depth increases significantly with decreasing saturation. While the core overall provides more stability, the adverse effect of this is more liquefaction in the outer layer.