Casing has a higher likelihood of failure in compacting reservoir than in a typical reservoir. Casing fails because reservoir compaction induces compression and shear stresses onto it. The compaction occurs as reservoir pressure depletes during production. High compacted reservoirs typically are composed of unconsolidated, overpressured rocks such as chalk, diatomite, and sandstone. Pore pressure depletion increases effective stress, which is the rock matrix stress pushing upward against overburden pressure. Effective stress may exceed rock compressive strength, inducing compaction. Wells in compacting reservoirs are likely to fail and to have high deformation rates. This paper introduces the concept of structural reliability to quantify the probability of casing failure in compacting reservoirs. Probabilistic models for casing capacities are developed using current design methods and a reservoir compaction load observed using finite-element model simulations. The proposed probabilistic models are used to define two limit-states functions used in predicting the probability of casing failure for two possible modes of failure: axial yielding and buckling failures. A limit-state function describes the casing condition as the casing experiences a reservoir compaction load. The limit state function is the input in component and system analyses for estimating the probabilities of failure as reservoir pressure is depleting. Sensitivity and importance analyses are also performed to determine the role and significant of parameters and random variables affecting the casing reliability. Applying the knowledge produced from this research to casing design can improve design reliabilities and forecast the probability of casing failure in compacting reservoirs.