This paper deals with the dynamic effect of pipeline installation and embedment for the on-bottom stability design of offshore pipelines on soft clay. On-bottom stability analysis of offshore pipelines on soft clay by DNV-RP-F109 (DNV, 2010) results in very unreasonable pipe embedment and concrete coating thickness. Thus, a new procedure of the on-bottom stability analysis was established considering dynamic effects of pipeline installation and pipe-soil interaction at touchdown point (TDP). This analysis procedure is composed of three steps: global pipeline installation analysis, local analysis at TDP, modified on-bottom stability analysis using DNV-RP-F109. Data obtained from the dynamic pipeline installation analysis were utilized for the finite element analysis (FEA) of the pipeline embedment using the non-linear soil property. From the analysis results of the proposed procedure, an optimum design of on-bottom stability of offshore pipeline on soft clay can be achieved. This procedure and result will be useful to assess the on-bottom stability analysis of offshore pipelines on soft clay. The analysis results were justified by an offshore field inspection.