A theoretical formulation was first established to evaluate the dynamic stress concentration factor (DSCF) around a circular opening under conditions of blasting stress wave incidence. A two-dimensional numerical model was then constructed by the particle flow code (PFC) in order to simulate the dynamic responses around an underground tunnel subjected to blasting load. In the simulation, a series of horizontal blasting stress waves were applied to an underground tunnel under various in situ stress states, and then the dynamic responses around the tunnel were analyzed from the viewpoint of the dynamic stress concentration and energy evolution. The results of theoretical analysis indicated that obvious dynamic effects occur at tunnel boundary during blasting stress wave incidence, and the DSCF at the roof and floor of the tunnel is much larger than that at two sidewalls when blasting stress wave was applied to left model boundary. The numerical results showed that high static compressive stress concentration around the underground tunnel results in the accumulation of substantial strain energy at the same location. The roof and floor of the tunnel are more prone to dynamic failures during the blasting loading process. In addition, the analysis of energy dissipation indicated that the strain energy reduction and the residual kinetic energy are positively related to the lateral pressure coefficient and the burial depth of the tunnel, and the residual kinetic energy is much larger than the strain energy reduction under the same condition. Furthermore, for an underground tunnel subjected to high in situ stress, the blasting stress wave with lower amplitude is sufficient to trigger severe dynamic failures.