An unconditionally stable Crank–Nicolson finite-difference time-domain (CN-FDTD) algorithm is presented for three-dimensional microwave circuit analysis. First, Mur's first–order absorbing boundary condition is applied this CN-FDTD algorithm. A symmetric successive over relaxation–preconditioned biconjugate-gradient algorithm is also proposed to solve the large sparse matrix equation obtained in the CN-FDTD method. Resonant cavity and several planar microstrip circuits are presented to illustrate the versatility of this technique. Numerical results indicate that with a time-step size excessively larger than the Courant–Friedrich–Levy limit, the accuracy of CN-FDTD is still much higher than that of the alternating-direction implicit FDTD.