A new simulation method is developed for the design of sailing boats. A time-accurate, finite-volume method is combined with the equations of motion, and the hydrodynamic properties of sailing boats are predicted. The hull configuration is designed by a CAD system, and a boundary-fitted grid system is generated for the finite-volume method. Six components of forces and moments are derived by integrating surface pressure and tangential stress, and input into the equations of motion. The translational or rotational motions obtained are represented by the deformation of the grid system. This is repeated in a time-marching procedure. This system is applied to the prediction of both steady and unsteady sailing performance of boats. The degree of accuracy is examined, and two examples of performance simulation are presented.