Bearing capacity of shallow foundations, the most important design aspect for structures, is estimated most commonly considering the soil strata as homogenous and rigid plastic. Naturally deposited soils exhibit a complex variation of undrained shear strength with depth, depending upon stress history, climatic and environmental exposure, etc. Few studies are available which consider nonhomogeneity and compressibility individually on undrained bearing capacity of footings on nonhomogeneous soils. The present study accounts for the combined effect of nonhomogeneity and compressibility of ground on undrained bearing capacity of circular footings. Finite element analysis is carried out to evaluate the bearing pressure versus settlement responses for circular footings for different degrees of nonhomogeneity and rigidity indices. Based on the obtained ultimate bearing capacity values using the hyperbola method, an equation for compressibility factor for estimating the undrained bearing capacity of foundations on for compressible nonhomogeneous deposits is developed. Parametric study is carried out for a wide range of compressibility–nonhomogeneity parameter, for footings at different depths. The compressibility factor obtained is a function of rigidity index, degree of nonhomogeneity and depth of footing. The effect of compressibility on undrained bearing capacity decreases with increase in nonhomogeneity, rigidity index of soil and depth of footing. Results obtained are applied for circular footing resting on Bothkennar and Paddington clays for illustration.