The waterjet propulsion system has been widely used in the military and civil fields because of its advantages of in terms of high efficiency and energy savings. In order to study the three-dimensional cavitation flow in the waterjet propulsion pump, the cavitation process of the waterjet propulsion pump was simulated numerically using the Zwart−Gerber−Belamri cavitation model and the RNG (Renormalization Group) k-ε model. The simulation results of cavitation on the waterjet propulsion pump and pump system show that, in the initial stage of cavitation, vapors first collect on the leading edge of the suction surface of the blade near the rim of the impeller. As the total pressure at the impeller inlet decreases, the cavitation region expands toward the trailing edge and the vapor fraction volume gradually increases. In order to simulate the cavitation state of the waterjet propulsion pump under the actual working conditions, a numerical simulation of the entire waterjet propulsion pump system with inlet passage was carried out. After assembling the inlet passage, the flow pattern at the impeller inlet becomes uneven, leading to irregular changes in the cavitation region of the impeller. The potential danger regions of cavitation are the lip of inlet passage and the upper and lower connecting curved section of the inlet passage. The performance of waterjet propulsion pump system changes greatly when the net positive suction head available (NPSHa) value of the pump reaches the critical value.