A 3-D time-domain seakeeping analysis tool has been newly developed by using a higher-order boundary element method with the Rankine source as the kernel function. An iterative time-marching scheme for updating both kinematic and dynamic free-surface boundary conditions is adopted for achieving numerical accuracy and stability. A rectangular computational domain moving with the mean speed of ship is introduced. A damping beach at the outer portion of the truncated free surface is installed for satisfying the radiation condition. After numerical convergence checked, the diffraction unsteady problem of a Wigley hull traveling with a constant forward speed in waves is studied. Extensive results including wave exciting forces, wave patterns and pressure distributions on the hull are presented to validate the efficiency and accuracy of the proposed 3-D time-domain iterative Rankine BEM approach. Computed results are compared to be in good agreement with the corresponding experimental data and other published numerical solutions.