A computational method has been developed to estimate hydrodynamic performance and flow fields around conventional and podded propulsion systems. The method employs a vortex-based lifting theory for the propeller and a potential surface panel method for the steering system. Computed velocity components show good agreement with experimental measurements behind a conventional propeller with and without the rudder. Calculated thrust, torque and lift also show good agreement with experiments. Computations are given for a podded propulsion system. The present method is useful to examine the performance of conventional and podded propulsion systems as a means of estimating propulsion and maneuverability characteristics of marine vehicles.