Earthquake response of liquid storage tanks isolated by the sliding systems is investigated under bi-directional earthquake motion (i.e. two horizontal components). The frictional force of sliding systems is modeled by two ways referred as conventional and hysteretic model. The continuous liquid mass is lumped as convective mass, impulsive mass and rigid mass. The corresponding stiffnesses associated with these lumped masses are worked out depending upon the properties of the tank wall and liquid mass. The governing equations of motion of the tank with sliding system are derived and solved by Newmark’s step-bystep method with iterations. The frictional forces mobilized at the interface of the sliding system is assumed to be velocity independent and their interaction in two horizontal directions is duly considered. For comparative study the earthquake response of isolated liquid storage tank obtained by conventional model is compared with corresponding response obtained by hysteretic model. In order to measure the effectiveness of isolation system the earthquake response of isolated tank is also compared with non-isolated tank. A parametric study is also conducted to study the effects of aspect ratio of the tank on the effectiveness of seismic isolation of the liquid storage tanks. It is found that the sliding systems are quite effective in reducing the earthquake response of liquid storage tanks. In addition, the same earthquake response of liquid storage tanks is predicted by conventional and hysteretic model of the sliding system.