Abstract The boundary-integral equation method is well suited for the calculation of the dynamic-stiffness matrix of foundations embedded in a layered visco-elastic halfspace (or a transmitting boundary of arbitrary shape), which represents an unbounded domain. It also allows pile groups to be analyzed, taking pile-soil-pile interaction into account. The discretization of this boundary-element method is restricted to the structure-soil interface. All trial functions satisfy exactly the field equations and the radiation condition at infinity. In the indirect boundary-element method distributed source loads of initially unknown intensities act on a source line located in the excavated part of the soil and are determined such that the prescribed boundary conditions on the structure-soil interface are satisfied in an average sense. In the two-dimensional case the variables are expanded in a Fourier integral in the wave number domain, while in three dimensions, Fourier series in the circumferential direction and Bessel functions of the wave number in the radial direction are selected. Accurate results arise with a small number of parameters of the loads acting on a source line which should coincide with the structure-soil interface. In a parametric study the dynamic-stiffness matrices of rectangular foundations of various aspect ratios embedded in a halfplane and in a layer built-in at its base are calculated. For the halfplane, the spring coefficients for the translational directions hardly depend on the embedment, while the corresponding damping coefficients increase for larger embedments, this tendency being more pronounced in the horizontal direction. For the rocking direction, both coefficients increase. The frequency dependence is more marked for increasing embedment. For the layer large oscillations of the dynamic-stiffness coefficients arise. For an undamped layer the damping coefficients vanish for frequencies below the fundamental frequency of the layer. It is demonstrated that for the foundation embedded either in a halfplane or in a layer, a two-dimensional model cannot be used to represent a truly three-dimensional situation.