The main purpose of this paper is to investigate the effect of transient stochastic analysis on nonlinear response of earth and rock-fill dams to spatially varying ground motion. The dam models are analyzed by a stochastic finite element method based on the equivalent linear method which considers the nonlinear variation of soil shear moduli and damping ratio as a function of shear strain. The spatial variability of ground motion is taken into account with the incoherence, wave-passage and site response effects. Stationary as well as transient stochastic response analyses are performed for the considered dam types. A time dependent frequency response function is used throughout the study for transient stochastic responses. It is observed that stationarity is a reasonable assumption for earth and rock-fill dams to typical durations of strong shaking.