The seismic damage assessment of arch dams, including dam-reservoir-foundation interaction, is investigated by using demand-capacity ratios obtained from linear analyses in this paper. A double curvature Type-5 arch dam is selected for the numerical example. The behaviour of the dam, reservoir and foundation are expressed in terms of displacements, using the Lagrangian approach. The foundation is taken into account as massless; behaviour of reservoir is assumed to be linearly elastic, inviscid and irrotational. The Parkfield (1966), Imperial Valley (1940) and Mammoth Lakes (1980) earthquakes, which have approximately the same peak ground acceleration, are chosen for the analyses. Dynamic equations of motions obtained from three dimensional finite element modelling of the coupled system are solved by using Newmark integration algorithm. The damage levels of the coupled system for the three different ground motions are demonstrated by using demand-capacity ratios and cumulative inelastic durations.