The aim of this paper is to investigate the effect of underground circular tunnels on cyclic behavior and liquefaction potential of soils surrounding them. For this purpose, an intensive numerical analyses scheme which includes three-dimensional, finite difference based total stress analyses on generic soil, tunnel and earthquake combinations has been performed. The effect of tunnel diameters, depth of tunnel center and the strength of soils on the maximum ground accelerations and liquefaction potential have been discussed in detail. The liquefaction potential is discussed in terms of both the factor of safety (FSliq) and liquefaction potential index. It is concluded that changing the diameter and support thickness of the tunnels does not make a remarkable change on peak ground accelerations. Similarly, the liquefaction potential of the soils considered does not depend on the diameter of the tunnel. However, it was shown that the most important parameters which are effective in peak ground acceleration and liquefaction potential are the depth of the tunnel and the rigidity of the soil in which the tunnel is constructed. The analyses showed that, the maximum ground acceleration values are observed in the middle of the two tunnels. Moreover, the peak ground acceleration value increases with increasing shear wave velocity and accordingly increases the resistance to liquefaction potential as expected. This study showed that, if a tunnel is to be built in a liquefaction prone zone, it should be constructed as deep as possible to reduce the probable risk of liquefaction.