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Coastal zones are always vulnerable to natural hazards while earthquakes and resulting liquefaction remains to be the most devastating phenomenon in urban areas. The residents of Defence Housing Authority and Clifton areas, part of Karachi coast have been experiencing jolts produced due to local seismic activity. As there are no seismographs installed, these jolts remain unrecorded and the local seismic behavior remains unexplained. In September (2006) a water tank in DHA Karachi, vertically submerged into the ground. An investigation was made in this context, samples were collected and analyzed which revealed that liquefaction induced by local seismic activity resulted in the submergence of the tank structure. The threat of liquefaction is increasing in the coastal belt of Karachi as new buildings of ever increasing heights are being constructed recently. The threat of liquefaction can be minimized by applying geo technical methods both by treating the soil layers and structure.