Since the primary cause of the variation of soil deformation modulus lies in the change of soil volume under three-dimensional stress, firstly, a ground foundation soil was regarded as a two-phase medium composed of hole and soil grain skeleton. A unit of ground foundation soil was abstracted into a unit of hollow spherical shell. An analytical model on the relationship among deformation modulus of ground foundation soils and soil grain skeleton as well as soil porosity was deduced by the Walsh formula and the displacement formula of spherical shell under volume stress. On this basis, the nonlinear characteristics of deformation modulus change of ground foundation soils was considered and the thought of step-loading was introduced, and then an iteration relation model of deformation modulus of ground foundation soils under incremental volume stress was developed. Afterwards, the effect of three-dimensional stress was taken into account, and another thought of layer-wise summation combined with step-loading was adopted. A new ground foundation settlement analysis method was then proposed by using the above-mentioned iteration relationship model for deformation modulus variation of ground foundation soils. It can not only reflect the influences of three-dimensional stress and deformation modulus variation of ground foundation soils on the analysis of ground foundation settlement, but also avoid the use of the compression curve of ground foundation soils or the static load test curves of ground foundation. Finally, the computation and analysis of practical engineering examples as well as the comparisons between the measured and calculated settlement results by the other existing methods show that the model and method proposed are more reasonable and feasible.