Although suffusion in the deep sandy gravel foundation probably cannot lead to seepage failure of the dam, fine grains inside the sandy gravel are lost. It results in increasing the permeability of the soil, but decreasing its strength and deformation modulus. The former causes the change of the seepage field of the foundation dam, which further induces the changes of deformation and stress of the dam body. While the latter reduces the deformation modulus and leads to the deformation and stress adjustment of the dam foundation. Since the stress and deformation of a dam and its foundation caused by suffusion bring some negative impact on the normal use and dam safety, quantitative assessment of the impact is urgently required for both of the design and operation management of such dams built on a deep internal instability sandy gravel foundation with a suspended cutoff wall. Therefore, a simulation method was proposed to investigate the effect of suffusion within the foundation on stress and deformation of the dam. A dam design with a typical suffusion suffered foundation was calculated and analyzed. It is found that in these two schemes, the effect of seepage fields on the stress and deformation of the dam foundation is much greater than that caused by the modulus decay. In general, the safety of the dam is not significantly reduced by the deformation and stress changes of the dam caused by suffusion.