Natural process-response changes in beach and dune configuration attendant with passage of Hurricane Eloise caused extensive structural damage to residential and commercial establishments in the vicinity of Panama City Beach, Florida. Damage was largely attributed to storm surge and wave set-up with subsequent beach scour; wind damage and flooding were minimal. Dune retreat and scour behind failed seawalls (from 12 to 18 m) resulted in many foundation failures and partial or complete collapse of the building superstructure. Because of the physiographic setting and storm characteristics, damage was primarily restricted to a narrow strip of shorefront property paralleling the Gulf of Mexico shoreline. Overwash was minimal owing to dune ridge and cliffed headland elevations. Sand removed from the beach was transported westward both alongshore and offshore. Much of the damage could have been prevented or minimized by proper location and design of buildings and an acute awareness of active coastal processes.