Soil conditions have a great deal to do with damage to structures during earthquakes. This paper attempts to assess the influence of dynamic soil-structure interaction (SSI) on the behavior of seismically isolated cable-stayed bridge supported on a rigidly capped vertical pile groups, which pass through moderately deep, layered soil overlying rigid bedrock. In the present approach, piles closely grouped together beneath the towers are viewed as a single equivalent upright beam. The soil-pile interaction is idealized as a beam on nonlinear Winkler foundation using continuously distributed hysteretic springs and viscous dashpots placed in parallel. The hysteretic behavior of soil springs is idealized using Bouc-Wen model. The cable-stayed bridge is isolated by using high-damping rubber bearings and the effects of SSI are investigated by performing seismic analysis in time domain using direct integration method. The seismic response of the isolated cable-stayed bridge with SSI is obtained under bi-directional earthquake excitations (i.e. two horizontal components acting simultaneously) considering different soil flexibilities. The emphasis has been placed on assessing the significance of nonlinear behavior of soil that affects the response of the system and identify the circumstances under which it is necessary to include the SSI effects in the design of seismically isolated bridges. It is observed that the soil surrounding the piles has significant effects on the response of the isolated bridge and the bearing displacements may be underestimated if the SSI effects are ignored. Inclusion of SSI is found essential for effective design of seismically isolated cable-stayed bridge, specifically when the towers are very much rigid and the soil condition is soft to medium. Further, it is found that the linear soil model does not lead to accurate prediction of tower base shear response, and nonlinear soil modeling is essential to reflect dynamic behavior of the soil-pile system properly.