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The effects can be divided into primary and secondary effects. Primary effects included the collapse of 200,000 buildings, the collapse of 1 km of the Hanshin Expressway, and destruction of 120 of the 150 quays in the port of Kobe. Secondary effects included disruption of the electricity supply. Residents were afraid to return home because of aftershocks that lasted several days (74 of which were strong enough to be felt).

The majority of deaths, over 4,000, occurred in cities and the suburbs in Hyōgo Prefecture. Most of the older traditional houses had heavy tiled roofs which weighed around 2 tons, intended to resist the frequent typhoons that plagued Kobe, but they were only held up by a light wood support frame. When the wood supports gave way, the roof crushed the unreinforced walls and floors in a "pancake" collapse. Newer homes have reinforced walls and lighter roofs to avoid this, but are more susceptible to typhoons. One in five of the buildings in the worst-hit area were completely destroyed (or rendered uninhabitable). About 22% of the offices in the central business district were rendered unusable and over half of the houses in that area were deemed unfit to live in.

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