In the dynamic analysis of concrete gravity dams most engineers consider the water domain as a semi-infinite fluid region. However there are practical cases where the reservoir cannot be treated as a uniform infinite channel. This is likely to happen when the stream meanders near the dam. In such a case the reservoir can no longer be considered an infinite length. The purpose of this study is to show that the length of the reservoir affects the response significantly, and it should not be modelled as an infinite domain in general. It is also concluded that fluid-foundation interaction should be taken into account rigorously rather than by an approximate one-dimensional model. In this study dam-reservoir, dam-foundation and reservoir-foundation interactions are all treated rigorously based on a combined finite element-boundary element procedure.