The piled raft foundation has shown growing applicability in the last two decades as an economic foundation type, where the structural loads are carried partly by the piles and partly by the contact stresses under the raft. The ratio of the load carried by piles to that carried directly by the contact stresses under the raft depends on many factors. Among these factors are the relative rigidity of the raft, the shear strength of the soil under the raft, the shear strength of the soil at the piles tin, the frictional stresses along the piles, and the piles settlement. The investigation of the effect of these factors requires a reliable finite element model that takes into consideration the nonlinear soil behaviour and the interaction between soil, piles, and all. In this article, two 3-D nonlinear (finite element models of piled raft foundation are adopted. In the first model, the interface elements are placed between the piles and soil, as well as between the raft and soil. In the second model, the interface elements are placed between the piles and the soil only and a gap is formed between the raft and the soil (free standing cap). The soil is modeled using Drucker Prager yield criteria while the piles and the raft are treated as a linear elastic material. The proposed models are applied to piled rafts resting on medium clay while the piles are rested on medium dense sand. The results reflect, the interaction among the piles, raft and soil. The study shows the effect of the contact between the soil and the raft on the pile loads and raft moment and deflection.