In this paper the material nonlinearity of soil has been taken into account for finding the seismic response of a soil stratum. A finite element model is used to properly account inhomogeneous nature of soil. Analyses are performed in the time domain. Comparisons of linear and nonlinear free field responses have been made. To consider the material nonlinearity of soil, two advanced plasticity based models are considered. Responses obtained with both models are compared with that obtained using elastic soil model. Thus effects of material nonlinearity considering both models are investigated. It was found that material nonlinearity of soil significantly effects free field response and the effect is much dependent on the frequency of excitation.