This chapter discusses Terzaghi's bearing capacity theory for determining the ultimate bearing capacity of shallow foundations. It summarizes the key assumptions of Terzaghi's theory, including homogeneous, isotropic soil; two-dimensional problem; general shear failure; and vertical, symmetrical loading. It describes the failure mechanism with three zones - an elastic central zone beneath the footing, and two radial shear zones on the sides that meet the ground surface at angles of 45° - φ/2. Terzaghi's theory uses a semi-empirical equation to calculate ultimate bearing capacity based on soil properties of cohesion, friction, and the effective overburden pressure at the foundation level.