We have numerically simulated lasing dynamics in cholesteric liquid crystal (CLC) on the basis of an auxiliary differential equation finite-difference time-domain (ADE-FDTD) method. In our ADE-FDTD procedure, the FDTD method is coupled with a rate equation in a four-level energy structure and equation of motion of polarization. Circularly polarized lasing at the edge of the stop band was successfully reproduced. Time-dependent field distributions were also investigated. Our model can be a powerful tool to study the underlying physics of CLC laser and also can be utilized to pursue the more efficient laser device architecture with reduced lasing threshold.