We present a Probabilistic Fault Displacement Hazard Analysis (PFDHA) for a strategic dam located in the Upper Tiber Valley (Northern Apennines of Italy) claimed to be sited on a supposed capable fault (Montedoglio fault). We verify the seismic capability of the Montedoglio fault through detailed geological and geophysical analyses. We find no evidence for considering the Montedoglio fault as an active and capable structure, the fault being constituted by a system of discontinuous parallel faults, apparently inactive since more than 56 ± 3 ka, and likely unable to nucleate strong surface rupturing earthquakes. Since the dam lies on the hanging wall of the closest major active fault of the area (Anghiari normal fault, ~1.5 km away), we investigate the likelihood of having distributed faulting at the dam’s site in case of a strong surface-rupturing earthquake occurring on the Anghiari fault. We apply a probabilistic approach to obtain hazard curves of exceedance of vertical displacement at the dam’s site for different rupture scenarios. We show that the mean hazard curve is always below an annual frequency of exceedance of 1 × 10− 5 , corresponding to displacement values below 1 cm over 100,000 years of return period. The study highlights several weaknesses and uncertainties in using PFDHA with state-of-the-art models, suggesting the need for improvements to enhance their applicability in earthquake engineering geology practice.