Large lateral displacement of trenched subsea pipelines may be induced by ground movement, landslides, ice gouging, etc. Pre-excavated seabed soil is usually used for backfilling as a cost-effective solution. The large difference between the shear strength of the highly remoulded backfill material and the native soil may significantly affect the pipeline-backfill-trench interaction, the failure mechanisms, and consequently the lateral soil resistance. However, this challenging and less-explored aspect has not been covered thoroughly in design codes. In this paper, the influences of pipeline-backfill-trench interaction on the failure mechanism and resultant lateral soil resistance were investigated by large deformation finite element analyses. Two different methods were considered and compared, including the remeshing and interpolation technique with small strain (RITSS) and coupled Eulerian-Lagrangian (CEL) methods, to assess their relative merits for this problem. A modified Tresca model considering strain-softening effects was incorporated and a parametric study was conducted to investigate the influences of key factors including the trench geometry, stiffness of backfill material, native seabed soil properties, burial depth, and intensity of pipeline-trench bed interaction. The study showed that the ignorance of the pipeline-backfill-trench interaction by using uniform soil may result in underestimation and overestimation of the lateral soil resistance against the pipeline moving inside the backfill and into the trench wall, respectively.