Large permanent ground deformations associated with active fault movements have caused severe damage to shallow foundations and supported structures. Nevertheless, field evidence shows that some buildings perform acceptably under large fault-induced displacements, indicating that displacement-tolerant foundation design is achievable. Understanding the nonlinear interaction between active faults and shallow foundations is therefore essential for reliable seismic design. This study investigates the behavior of shallow foundations subjected to reverse fault movements using two-dimensional plane strain finite element analyses in Abaqus. The numerical model incorporates realistic fault–foundation geometry, soil–structure interaction, and nonlinear material behavior. Reinforced concrete is modeled using the Concrete Damaged Plasticity (CDP) model, while soil behavior is represented by an extended Mohr–Coulomb model with strain-softening. Superstructure loads are applied as column-based strip loads, and fault displacement is imposed incrementally along the rupture path. The results show that elastic concrete models are inadequate for predicting foundation response, whereas the CDP model provides more realistic settlement and rotation patterns. Increased vertical surcharge reduces foundation rotation near the fault outcrop, but this effect diminishes with increasing distance from the fault. Lower fault dip angles shift the rupture path toward the footwall, and foundations closer to the fault with smaller thickness experience greater settlement and angular distortion.