The numerical analysis of a waterjet propulsion system was performed to provide detail understanding of complicated flow phenomena including interactions of intake duct, rotor, stator, and contracted discharge nozzle. The incompressible RANS equations were solved on moving multiblocked grid system. To handle interface boundary between rotor and stator, the sliding multiblock method was applied. The numerical results were compared with experiments and good agreement was obtained. The complicated viscous flow features of the waterjet, such as secondary flow inside the intake duct, the recovery of axial flow by the role of the stator, and tip and hub vortex, etc. were well analyzed by the present simulation. The performance of thrust and torque was also predicted.