A closed‐form formulation for the dynamic analysis of lateral response of floating piles in a saturated finite‐thickness soil layer is presented in this paper. Governing equations of the saturated soil are established on the basis of Biot's poroelastic theory, solution to which results in the lateral resistance of surrounding saturated soil to pile deflection. Closed‐form expressions of the lateral deformations of pile along depth and the dynamic compliances at pile head are obtained by solving a system of linear equations from the boundary and continuity conditions, instead of solving sophisticated integral equations in existing boundary integral methods. The parametric study focuses on exploring the sensitivity of pile compliances and deformations to the main problem parameters, including pile‐soil modulus ratio and soil permeability.