A computational framework is presented for dynamic strain localization and deformation analyses of water-saturated clay by using a cyclic elasto-viscoplastic constitutive model. In the model, the nonlinear kinematic hardening rule and softening due to the structural degradation of soil particles are considered. In order to appropriately simulate the large deformation phenomenon in strain localization analysis, the dynamic finite element formulation for a two-phase mixture is derived in the updated Lagrangian framework. The shear band development is shown through the distributions of viscoplastic shear strain, the axial strain, the mean effective stress, and the pore water pressure in a normally consolidated clay specimen. From the local stress–strain relations, more brittleness is found inside the shear bands than outside of them. The effects of partially drained conditions and mesh-size dependency on the shear banding are also investigated. The effect of a partially drained boundary is found to be insignificant on the dynamic shear band propagation because of the rapid rate of applied loading and low permeability of the clay. Using the finer mesh results in slightly narrower shear bands; nonetheless, the results manifest convergency through the mesh refinement in terms of the overall shape of shear banding and stress–strain relations. Copyright © 2013 John Wiley & Sons, Ltd.