Based on the displacement discontinuity method and the discrete fracture unified pipe network model, a sequential iterative numerical method was used to build a fracturing-production integrated numerical model of shale gas well considering the two-phase flow of gas and water. The model accounts for the influence of natural fractures and matrix properties on the fracturing process and directly applies post-fracturing formation pressure and water saturation distribution to subsequent well shut-in and production simulation, allowing for a more accurate fracturing-production integrated simulation. The results show that the reservoir physical properties have great impacts on fracture propagation, and the reasonable prediction of formation pressure and reservoir fluid distribution after the fracturing is critical to accurately predict the gas and fluid production of the shale gas wells. Compared with the conventional method, the proposed model can more accurately simulate the water and gas production by considering the impact of fracturing on both matrix pressure and water saturation. The established model is applied to the integrated fracturing-production simulation of practical horizontal shale gas wells. The simulation results are in good agreement with the practical production data, thus verifying the accuracy of the model.