This paper presents the analytical layer-element method to analyze the consolidation of saturated multi-layered soils caused by a point sink by considering the anisotropy of permeability. Starting from the governing equations of the problem, the solutions of displacements and stresses for a single soil layer are obtained in the Laplace–Hankel transformed domain. Then, the analytical layer-element method is utilized to further derive the solutions for the saturated multi-layered soils in the transformed domain by combining with the boundary conditions of the soil system and continuity conditions between adjacent layers. The actual solutions in the physical domain can be acquired by the inversion of Laplace–Hankel transform. Numerical results are carried out to show the accuracy and stability of the proposed method and evaluate the influence of sink depth and anisotropic permeability on excess pore pressure and surface settlement. Copyright © 2011 John Wiley & Sons, Ltd.