In this study an algorithm and a 3D solver is developed to solve the flow field around air-cushion vehicles (ACV) in vicinity of free surface. A single set of dimensionless equations is derived to handle both liquid and air phases in viscous 3D incompressible free surface flows in general curvilinear coordinates. The momentum equations are solved using the SIMPLE method in a staggered grid. The Lagrangian approach in the computational domain is also applied in the context of the VOF method to resolve the free surface. To demonstrate the robustness and versatility of the code, an application of this method on the impact problem of a circular cylinder is presented that is compared to experimental, theoretical and other computational results. In a 3D problem, the gravity-fill test is solved in both Cartesian and randomly generated curvilinear grid system. Comparison of results with the available experimental data and other numerical results is presented as well. At last, the code is applied to solve the two and three dimensional air and water flow field around an ACV and the effects of several parameters including the under skirt pressure distribution, initial air gap and effect of Fr. number on the wave elevation and wave making drag are investigated. It is shown that the presented method and the code are, robust and accurate enough to produce complicated 3D flow fields around ACV’s.