This thesis presents the development of a reliable and efficient technique for the numerical simulation of dynamic soil-structure interaction problems in anisotropic and nonhomogeneous unbounded soils of arbitrary geometry. Such a technique is indispensable in the seismic analysis of large-scale engineering constructions and, to my best knowledge, does not exist at present. The theoretical framework of the research is based on the scaled boundary finite-element method. The following advances are achieved: The scaled boundary finite-element method is extended to simulate the dynamic response of non-homogeneous unbounded domains. The scaled boundary finite element equations in the frequency and time domains are derived for power-type non-homogeneity frequently employed in geotechnical engineering. A high-frequency asymptotic expansion of the dynamic-stiffness matrix is developed. The frequency domain analysis is performed by integrating the scaled boundary finite-element equation in dynamic stiffness. In the time domain, the scaled boundary finite-element equation including convolution integrals is solved for the unit-impulse response at discrete time stations. A Padé series solution for the scaled boundary finite-element equation in dynamic stiffness is developed. It converges over the whole frequency range as the order of the approximation increases. The computationally expensive task of numerically integrating the scaled boundary finite-element equation is circumvented. Exploiting the sparsity of the coefficientmatrices in the scaled boundary finite-element equation leads to a significant reduction in computer time and memory requirements for solving large-scale problems. Furthermore, lumped coefficient matrices are obtained by adopting the auss-Lobatto-Legendre shape functions with nodal quadrature, which avoids the eigenvalue problem in determining the asymptotic expansion. A high-order local transmitting boundary constructed from a continued-fraction solution of the dynamic-stiffness matrix is developed. An equation of motion as occurring in standard structural dynamics with symmetric and frequency-independent coefficient matrices is obtained. This transmitting boundary condition can be coupled seamlessly with standard finite elements. Transient responses are evaluated by using a standard timeintegration scheme. The expensive task of evaluating convolution integrals is circumvented. The advances developed in this thesis are applicable in other disciplines of engineering and science to the analysis of scalar and vector waves in unbounded media.