Underwater explosion cavitation has an important influence on the shock wave, explosion bubble, and structural deformation. The one-fluid model is usually used in underwater explosion cavitation. It is assumed that the cavitation is induced suddenly when the pressure is lower than the saturated pressure. The biggest deficiency of the model is that it is difficult to consider the temperature change in the cavitation domain. It is known that cavitation is sensitive to the temperature. In this paper, we study UNDEX cavitation characteristics based on the two-fluid model proposed by Chiapolino et al. (2017), which holds that the cavitation phenomenon is the result of the phase transition between the gas and liquid phases. This model is composed of the 4-equation model with phase transition relaxation, which is solved by a simple fractional step. In this article, we briefly introduce the compressible multiphase fluids model and successfully extent it to the engineering research field of underwater explosion cavitation. Through the quantitative analysis of the vapor phase content, it is suggested that the initial mass fraction of vapor phase in water should be set to less than 10−7. Meanwhile, it can be observed that the bulk cavitation near the free surface can evolve into a vortex ring until it collapses. Numerical results show that the collapsed pressure cannot be ignored relative to the shock wave in the bulk and local cavitation. Numerical results of this paper display that the phase transition model shows a great prospect of engineering application in underwater explosion cavitation.