In this paper, a new approach for the stochastic analysis of finite element modeled underground pipeline system under earthquake excitations is proposed, where a new developed physical random earthquake model and the probability density evolution method are adopted. Based on the physical process of seismic spread, the random earthquake model adopted not only indicates the physical relationship between the random earthquake ground motion and several key random parameters, but also presents the probability configuration of random seismic motions. Associating with the developed probability density evolution method for stochastic structures, the instantaneous probability density and the evolution process for the seismic response of underground pipeline can be analyzed numerically, and then the stochastic response can be obtained easily. With the finite element method, the stochastic response of underground pipeline under seismic excitation can be studied effectively. Using the proposed method, numerical example under different random conditions is investigated, showing that the proposed method is of high application in considering random seismic excitation with random soil parameter at the same time.