AbstractThe investigation of equivalent elastic method is made to predict settlements and stresses of multi‐layered grounds and improved grounds. Analytical models to represent the heterogeneous elastic properties of layers in vertical and horizontal directions for multi‐layered grounds and improved grounds are proposed in taking into account the equivalent elastic modulus and the equivalent thickness. By introducing the equivalent thickness derived from Terzaghi's formula of the vertical stress, the equivalent elastic method of using the equivalent elastic modulus and the equivalent thickness is applied to the formulations concerning immediate settlements and vertical stresses in multi‐layered grounds and improved grounds. Comparison is performed between rigorous solutions and simulations for immediate settlements and vertical stresses in multi‐layered grounds and improved grounds. It is found that the proposed method is able to describe properly the characteristics of distributions for settlements and vertical stresses in multi‐layered grounds and improved grounds. Copyright © 2007 John Wiley & Sons, Ltd.