Different from terrestrial equipments (tanks and wheeled vehicles) and airborne crafts (planes or helicopters), the R & M (repair and maintenance) issues about naval vessels are profoundly related to their gigantic size, numerous operators, and thousands of various spare parts which individually have small quantity demand for logistic support. That is why the R & M of naval vessels is much more complicated. According to the Defense White Paper of 2009, the whole military force is going to be downsized. Meanwhile, the rescuing and relieving tasks for natural disasters have also been officially assigned to them. Therefore, the attendance rate of ships is increasing, which causes lower reliability and higher failure rate and consequently the rising R & M load. The dynamical complexity existing among the variables associated with R & M of naval vessels, which are non-linear, interconnecting and time-delaying, makes the system dynamics a very suitable theory for analyzing this kind of issue systematically. During the study, a model was built based on system dynamics. After reviewing related literatures and discussing with professionals in this field, the associated variables were defined and their casual diagrams were also established. We developed the stock-flow diagrams of three subsystems-- R & M process, man power, and material supply. Afterward these three subsystems were integrated into an R & M dynamical system model. Policy influence simulation and scenario design was carried out after basic tests confirming its validity. The results indicated that a higher R & M capacity could obviously reduce the number of ships stalled in shipyard and effectively increasing the discharge rate. Therefore we recommended the associated authority to boost R & M capacity by aggressive actions such as increasing the ratio of recruitment, building R & M knowledge management system and strengthening the education and training. For the follow-up research, we suggest more interviews with industrial personnel and experts, collecting R & M data for each type of naval vessel, deliberating the factors influencing the R & M from different aspects and appropriately defining system boundary in order to establish a model which is more similar to the real world. Therefore its simulated results can approach to the reality further, and the scenario analysis with conclusions induced from policy influence simulation can be more specific for the authorities. Keywords: repair and maintenance of naval vessels, system dynamics, strategy