Abstract: p-y curves of lateral reaction of piles can be found in the literatures, most of which are based on experimental data (such as API, hyperbolic curve) and few on analytical solutions. A load transfer function derived from the theoretical analysis is presented. First, a subsection elastic loading theory equivalent to the upper bound analysis is derived. Based on this method, a plane-strain solution for a circular section pile in a ringed circular elastic medium is given to study the relation between horizontal displacements and an average plastic strain of the soils around a pile in undrained behavior. This average strain will employ the stress-strain behavior of the soils as established from the triaxial tests so that a new two-dimensional p-y curve is developed. Then, the initial soil-pile interaction stiffness and the ultimate unit resistance are presented considering the three-dimensional effect, and it can be extended to analyze the three-dimensional lateral reaction of piles. The advantage of the p-y curve is that it is capable of taking into account the effect of change in soils and pile properties on the resulting p-y curves. Finally, a specific numerical application of the results is made, and the solutions from this p-y curve and other conventional methods are verified by comparing with the data from field tests and finite element methods, clearly stating the deficiency and the corresponding ranges of application.