Vertical cylindrical steel tanks are sensitive to differential settlement beneath the tank wall. Most previous studies were based on idealized harmonic settlement, however, for thin shell structures of high nonlinear behavior, it is obviously inappropriate to obtain the results under real settlement by simple summation of harmonic solutions. Real settlement of steel tanks can be grouped into two types - global differential settlement and local differential settlement. This paper examines the nonlinear response and stability behavior of floating-roof steel tanks under both types of settlement. It is shown that, for tanks under global differential settlement, local buckling occurs at the eave ring, followed by a stable post-buckling behavior, and final failure is by overall buckling of the tank shell; while for tanks under local differential settlement, the structural response is related to the degree of localization. At highly localized settlement, local snap-through buckling occurs at the tank wall, but it does not lead to a serious consequence, and the post-buckling behavior can also be utilized in design.