In order to investigate the stability of dam foundations with faults and the effect of the concrete plug treatment on the stability of the dam foundations, a gravity dam modeling test machine has been developed. Tests are carried out with this machine using three types of dam foundation models, namely, the no-fault, the one-fault, and the plug installation models. The one-fault model tests are performed with three fault locations, namely, the upstream edge, the center, and the downstream edge locations. Based on the experimental results, it is confirmed that in the downstream edge fault model, the stress is concentrated at the downstream edge. For both the central fault model and the upstream fault model, the effect of the fault on the stress distribution is small. In the plug installation model tests, the depth of the plug is varied at 10, 30, and 60 mm. From the results of the plug installation model tests, it is confirmed that plugs are able to distribute the concentrated stress and restrict the deformation of dam foundations.