Aboveground cylindrical steel storage tanks are one of the widely used structures in industries, refineries and power plants. Because the shell of steel tanks is thin, these tanks may suffer damage or buckling of the shell under the effect of an earthquake. In this study, the dynamic buckling of the steel tank under the effect of the horizontal and vertical components of the earthquake has been evaluated using the incremental dynamic analysis method. The aim of this research is to investigate the importance of the effect of the vertical component of the earthquake on the dynamic buckling of steel tanks. A cylindrical steel tank with a diameter of 30 meters and a height-to-diameter ratio of 0.40 was designed based on the API 650 standard and was modeled and analyzed by the finite element method. The liquid storage tank is subjected to a series of horizontal and vertical earthquake records of varying increasing intensities. Using the dynamic buckling criterion, the average critical PGA and the mean critical base shear force of tank shell buckling have been estimated. The results of the dynamic analysis showed that the vertical component of the earthquake caused a significant decrease in the buckling capacity of the tank shell. Buckling of the tank shell was occurred in the lower part of the shell and at a height of 2.8 meters above the tank floor for only one horizontal component and two horizontal and vertical components of the earthquake. The critical dynamic base shear force of the tank under bi-directional excitation (HV) is 23.5% smaller than the those for tank subjected to only horizontal excitation (H).