A numerical panel method based on the potential flow theory has been refined and applied to the simulations of steady and unsteady cavitating flows inside water-jet pumps. The potential flow inside the water-jet is solved simultaneously in order to take the interaction of all geometries (blades, hub and casing) into account. The integral equation and boundary conditions for the water-jet problem are formulated and solved by distributing constant dipoles and sources on blades, hub and shroud surfaces, and constant dipoles in the trailing wake sheets behind the rotor (or stator) blades. The interaction between the rotor and stator is carried out based on an iterative procedure by considering the circumferentially averaged velocities induced on each one by the other. The present numerical scheme is coupled with a 2-D axisymmetric version of the Reynolds Averaged Navier-Stokes (RANS) solver to evaluate the pressure rise on the shroud and simulate viscous flow fields inside the pump. A tip gap model based on a 2-D orifice equation derived from Bernoulli’s obstruction theory is implemented in the present method to analyze the clearance effect between the blade tip and the shroud inner wall in a global sense. The reduction of the flow from losses in the orifice can be defined in terms of an empirically determined discharge coefficient (CQ) representing the relationship between the flow rate and the pressure difference across the gap because of the viscous effect in the tip gap region. The simulations of the rotor/stator interaction, the prediction of partial and super cavitation on the rotor blade and their effects on the hydrodynamic performance including the thrust/torque breakdown of a water-jet pump are presented. The predicted results, including the power coefficient (P*), head coefficient (H*), pump efficiency (η), thrust and torque coefficients (KT and KQ), as well as the cavity patterns are compared and validated against the experimental data from a series of on the ONR AxWJ-2 pump at NSWCCD. / text