In order to quantitatively investigate the effects of degree of saturation on the cyclic shear characteristics and seismic response of sloping grounds, undrained cyclic triaxial tests and online pseudo-dynamic response tests were conducted on decomposed granite (Masado) soil samples. Online testing is a method of feeding soil response characteristics directly from soil samples into a modeling algorithm. In the both series of tests, soil specimens prepared under different degrees of saturation and subjected to various initial shear stresses were tested. The results obtained from the tests quantitatively confirmed the notion that unsaturated soils do not undergo large strength decrease as fully saturated ones do. The initial static shear stress and applied dynamic stress define the mode of failure of the soil. Higher saturation ratio and/or steeper slopes lead to lower cyclic resistance and larger deformation. The experimental results obtained were then used in conjunction with pseudo-static slope stability analysis and modified Newmark sliding block model to estimate the deformation of embankments which were under different degrees of saturation. The example calculations clearly showed the effect of saturation on the magnitude of seismic-induced displacements of embankments