The tunnel construction leads to altering the initial stresses in its surrounding domain due to overburden. This redistribution of stresses generates the forces in the tunnel lining and are enhanced by seismic loading. The variation of these forces in the tunnel lining are influenced by the horizontal stresses. In rocks, the horizontal stresses may be more than vertical stresses. In this study, coefficient of lateral earth pressure is varied from 0.5 to 2 for finding its effect on circular tunnel lining under seismic condition by finite element modeling. The harmonic loading of fundamental frequency has been used to simulate seismic loading. The normal force, shear force and bending moment are compared all along the tunnel lining. Results of this study illustrate that the lateral earth pressure coefficient highly influences the values of the forces as well as the locations of the peak values. Though, this was as expected, however, not examined in the literature yet.