A computational fluid dynamic (CFD) model for the ultrahigh velocity abrasive waterjet (AWJ) is established using a commercial CFD package, Fluent5. The model is then used to simulate the jet dynamic characteristics after it flows through a fine nozzle under the steady state, turbulent, and three-phase flow conditions. The selection of boundary conditions, initial guess, solver control, and convergence strategies of the model is discussed. Plausible characteristics of the flow as well as the particle velocity and trajectory at different input conditions are predicted and discussed. It is shown that within the computational domain of 10 mm considered, there is a minimum variation of the velocity and pressure along the jet while the variation across the jet is not significant within 80% of the jet diameter. Interpretations of some cutting phenomena in AWJ cutting based on these findings are also given.