Dam-reservoir interaction is one of the classic coupled problems in which two various environments with different physical characteristics are in contact with each other on interface boundary. Consideration of such interaction is important in design of new dams as well as on safety evaluation of the existing ones. In the present study, the effect of hydrodynamic pressures at various reservoir operational levels on seismic behavior of an arch dam is investigated. Dez ultra-high arch dam in Iran was selected as case study and all contraction and peripheral joints were simulated using node-to-node contact elements which have the ability of opening/closing and tangential movement. In addition, stage construction effects including joint grouting based on available construction reports were considered. The reservoir was assumed to be compressible and the foundation rock was modeled to account for its flexibility. The TABAS earthquake record was used to excite the finite element model of dam-reservoir-foundation system. It was found that dam-reservoir interaction has significant structural effects on the system and generally, operating the considered arch dam at different water levels can highly affects the distribution of the crack prone area under the maximum credible earthquake.