Underground structures such as tunnels, pipelines, car parks etc. can suffer severe damage during strong earthquake events. As many of these structures are buoyant, soil liquefaction due to earthquake loading can result in their floatation. In this paper, the floatation of rectangular tunnels, normally constructed by the cut-and-cover method, is investigated using dynamic finite element analyses. Sinusoidal and more realistic earthquake input motions are considered. The acceleration response of the tunnel and the soil surface following soil liquefaction is investigated. The generation of excess pore pressures in the soil around the tunnel and the consequent floatation of the tunnel are observed for both types of input motions. It will be shown that the amount of tunnel uplift depends on the type of input motion with the sinusoidal motion leading to a significantly larger uplift compared with the more realistic Kobe motion. Further, the effect of soil permeability on the floatation of the rectangular tunnel is investigated. It will be shown that tunnels can suffer floatation in finer soils with low permeabilities, whilst coarser soils with high permeability can lead to tunnel settlements owing to the rapid re-consolidation of the liquefied soils. The average axial strains in the soil above the tunnel will be shown to decrease with decreasing permeability.