Abstract: The settlement reducing pile foundation is a new type of composite pile foundation,which has found its use for only twenty years.This type of foundation is designed with smaller pile diameter and less pile amount than the conventional pile foundations and therefore costs less.Up to now,the design method for this type of pile foundation is based on the existing experience to some extent.An elastoplastic FEM program has been developed to simulate the function of the settlement reducing pile foundation.More attentions have been paid on the factors which are concerned with the foundation settlements.Design procedures of this type of foundation are given and some related problems discusse.Observed data agree well with the calculation results.Analysis results show that the settlement of building can be controlled by selecting suitable length of the piles,which is more effective than increasing the number of piles or enlarging the foundation area.