An iterative time marching procedure for solving incompressible viscous flows has been applied to the flow around a propeller. This procedure solves three-dimensional Navier-Stokes equations on a moving, body-fitted, non-orthogonal grid using first-order accurate scheme for the time deivatives and second-and third-order accurate schemes for the spatial derivatives. To accelerate iterative process, a multigrid technique has been applied. This procedure is suitable for efficient execution on the current generation of vector or massively parallel computer architectures. Generally good agreement with published experimental and numerical data has been obtained. It was also found that the multigrid technique was efficient in reducing the CPU time needed for the simulation and improved the solution quality.