The dynamic performance of air foil bearings relies on a coupling between a thin air film and an elastic foil structure. A number of successful analytical techniques to predict dynamic performance have been developed. However, the evaluation of its dynamic characteristic is still not enough because of the mechanical complexity of the foil structure and strong nonlinear behavior of friction force. This work presents a nonlinear transient analysis method to predict dynamic performance of foil bearings. In this method, time dependent Reynolds equation is used to calculate pressure distribution and a finite element method is used to model the bump foil structure. The analysis is treated with a direct implicit integration technique that can handle nonlinear problems and the stick-slip algorithm is used to consider friction force. Using this method the response to the mass unbalance excitation is investigated for various design parameters and operating conditions. The results of analysis show that foil bearing is very effective on the restriction of vibration at the resonance frequency compared to the rigid surface bearings and the effectiveness depends on the operating conditions, static load and a amount of mass unbalance. In addition, there exist optimum values of friction coefficient, bump foil stiffness and number of circumferential slit with regards to minimizing dynamic response at the resonance frequency. These optimum values are system dependent.