A new method of analyzing seismic response of soil-building systems is introduced. The method is based on the discrete-time formulation of wave propagation in layered media for vertically propagating plane shear waves. Buildings are modeled as an extension of the layered soil media by assuming that each story in the building is another layer. The seismic response is expressed in terms of wave travel times between the layers, and the wave reflection and transmission coefficients at layer interfaces. The calculation of the response is reduced to a pair of simple finite-difference equations for each layer, which are solved recursively starting from the bedrock. Compared with commonly used vibration formulation, the wave propagation formulation provides several advantages, including the ability to incorporate soil layers, simplicity of the calculations, improved accuracy in modeling the mass and damping, and better tools for system identification and damage detection.A new method of analyzing seismic response of soil-building systems is introduced. The method is based on the discrete-time formulation of wave propagation in layered media for vertically propagating plane shear waves. Buildings are modeled as an extension of the layered soil media by assuming that each story in the building is another layer. The seismic response is expressed in terms of wave travel times between the layers, and the wave reflection and transmission coefficients at layer interfaces. The calculation of the response is reduced to a pair of simple finite-difference equations for each layer, which are solved recursively starting from the bedrock. Compared with commonly used vibration formulation, the wave propagation formulation provides several advantages, including the ability to incorporate soil layers, simplicity of the calculations, improved accuracy in modeling the mass and damping, and better tools for system identification and damage detection.