Abstract In real flows unsteady phenomena connected with the circumferential non-uniformity of the main flow and those caused by oscillations of blades are observed only jointly. An understanding of the physics of the mutual interaction between gas flow and oscillating blades and the development of predictive capabilities are essential for improved overall efficiency, durability and reliability. In the study presented, the algorithm proposed involves the coupled solution of 3D unsteady flow through a turbine stage and the dynamics problem for rotor-blade motion by the action of aerodynamic forces, without separating the outer and inner flow fluctuations. The partially integrated method involves the solution of the fluid and structural equations separately, but information is exchanged at each time step, so that solution from one domain is used as a boundary condition for the other domain. 3-D transonic gas flow through the stator and rotor blades in relative motion with periodicity on the whole annulus is described by the unsteady Euler conservation equations, which are integrated using the explicit monotonous finite volume difference scheme of Godunov–Kolgan. The structural analysis uses the modal approach and a 3-D finite element model of a blade. The blade motion is assumed to be constituted as a linear combination of the first natural modes of blade oscillations, with the modal coefficients depending on time. A calculation has been done for the last stage of the steam turbine, under design and off-design regimes. The numerical results for unsteady aerodynamic forces due to stator–rotor interaction are compared with results obtained while taking into account blade oscillations. The mutual influence of both outer flow non-uniformity and blade oscillations has been investigated. It is shown that the amplitude-frequency spectrum of blade oscillations contains the high-frequency harmonics, corresponding to the rotor moving past one stator blade pitch, and low-frequency harmonics caused by blade oscillations and flow non-uniformity downstream from the blade row; moreover, the spectrum involves the harmonics which are not multiples of the rotation frequency.