Breaking-wave-induced dynamic response and instability of seabed around a caisson breakwater are investigated. A seabed-rubble-breakwater system is modeled using finite elements. The impact response of the porous seabed and rubble foundation is assumed to be governed by the coupled Biot equations, and three possible formulations are considered with respect to the inclusion of inertial terms. The response is presented in terms of shear stress and pore pressure distributions at three locations underneath the breakwater. The effect of seabed and wave parameters and the inertial terms on the impact response is investigated through parametric studies. Analyses show that usually partly dynamic formulation yields the largest response amplitudes as compared to the fully dynamic formulation, which is the most complete form. The instability of seabed and rubble mound as a result of instantaneous liquefaction is also studied. Breaking wave-induced pressures in some cases are found to cause liquefaction in the rubble and the seabed. The effect of some parameters on the instability is found to be significant. Copyright (C) 2011 John Wiley & Sons, Ltd.