The issues of choosing proper intercepted range of dynamic analysis model and its artificial boundary setting were discussed. Based on the distribution characteristics of seismic wave field of underground caverns, the setting method for artificial boundary used in time history analysis of underground caverns was presented, which allowed the free surface not to be covered by analysis model. The wave field reflected by free surface was calculated using analytical method and then incident into analysis model through artificial boundary. Based on wave field separation principle, artificial boundary surrounding the analysis model could well absorb outgoing scattered wave to guarantee the accuracy of computation. The theoretical test and practical case calculation indicated that the presented method is sufficiently accurate and able to meet the requirements of time history analysis of underground caverns. Meanwhile, the amount of computation can be considerably reduced and the time-consuming is lowered accordingly.