A surface panel method for the hydrodynamic analysis of a propeller operating in steady flow is described. The surface of propeller blade and hub is approximated by a number of small hyperboloidal quadrilateral panels with constant source and doublet distributions. The surface of trailing vortex sheet is also represented by hyperboloidal quadrilateral panels with a constant doublet distribution. The strength of source and doublet is determined by solving the boundary value problem at control point on each panel surface. Special emphasis was put on the Kutta condition of equal pressure on upper and lower surfaces at the trailing edge.Pressure distributions on the blade calculated by the present method are in good agreement with the experimental data. A better agreement of pressure distributions near the hub is observed when compared with those of a conventional lifting surface method. Open-water characteristics of propeller calculated by the present method are also in good agreement with experimental data.