The technique of reinforcing soil for foundation improvement is well established. This paper addresses the aspect of settlement of reinforced sand foundations, where the major part of the existing work deals with the aspect of bearing capacity. A detailed analysis is made paying individual attention to soil, reinforcement, and the interface between the two. A three-dimensional, nonlinear finite-element analysis is presented that uses a three-dimensional, nonlinear soil-reinforcement interface friction element, along with other three-dimensional elements to model the system. The results of the analysis are compared with those from tests conducted in the laboratory and are found to be in good agreement. The studies lead to a better understanding of the behavior of the system at different stages of loading.