A process of underwater explosion of a charge near a rigid wall includes three main stages: charge detonation, bubble pulsation and jet formation. A smoothed particle hydrodynamics (SPH) method has natural advantages in solving problems with large deformations and is suitable for simulation of processes of charge detonation and jet formation. On the other hand, a boundary element method (BEM) is highly efficient for modelling of the bubble pulsation process. In this paper, a hybrid algorithm, fully utilizing advantages of both SPH and BEM, was applied to simulate the entire process of free and near-field underwater explosions. First, a numerical model of the free-field underwater explosion was developed, and the entire explosion process–from the charge detonation to the jet formation–was analysed. Second, the obtained numerical results were compared with the original experimental data in order to verify the validity of the presented method. Third, a SPH model of underwater explosion for a column charge near a rigid wall was developed to simulate the detonation process. The results for propagation of a shock wave are in good accordance with the physical observations. After that, the SPH results were employed as initial conditions for the BEM to simulate the bubble pulsation. The obtained numerical results show that the bubble expanded at first and then shrunk due to a differences of pressure levels inside and outside it. Here, a good agreement between the numerical and experimental results for the shapes, the maximum radius and the movement of the bubble proved the effectiveness of the developed numerical model. Finally, the BEM results for a stage when an initial jet was formed were used as initial conditions for the SPH method to simulate the process of jet formation and its impact on the rigid wall. The numerical results agreed well with the experimental data, verifying the feasibility and suitability of the hybrid algorithm. Besides, the results show that, due to the effect of the Bjerknes force, a jet with a high speed was formed that may cause local damage to underwater structures.