The fluid-structure interaction between the water storage tank and water can make the water sloshing, which may provide impulse pressure on the water tank, reduce the dynamic response of the shield building, and then achieve out the seismic reduction of NPP when the structure is subjected to earthquake loading. In this paper, the coupling fine finite element model of AP1000 shield building was established based on the Arbitrary Lagrangian Eulerian (ALE) algorithm. 8 cases of water levels were designed and dynamic response of water storage tank was investigated when the structure was subjected to El-Centro earthquake which satisfies to RG1.60 spectrum. The interaction rule and mechanism of acceleration and displacement and water height, height of air, height ratio of water level and oscillation frequency of water tank were parametrically analyzed. Finally, the optimal water level for seismic decay was obtained. The numerical results clearly show that a certain water level can effectively reduce the seismic response of NPP under earthquake loading. It is also indicated that the optimal water level is case 3 when the height of water and height ratio are 8.8m and 0.75, respectively, which can reduce seismic response most effectively.