A 3-dimensional nonlinear method for analysis of underwater line structures is presented. This analysis method is formulated by the finite element method, and dynamic behavior of the structures is solved in time domain. The motion equations are solved by Newmark time integration scheme. The method can handle all nonlinearities relating to the dynamic motion of the line structures such as hydrodynamic nonlinearity, geometrical nonlinearity, nonlinear boundary condition, and so on. The Newton method is employed to improve stability of the iteration solution when a dynamic equilibrium condition is obtained. The computational method has been verified through comparison with model tests conducted by the authors. These tests required the development of a general-purpose ultrasonic ranging system, which is described briefly. Usually high accuracy is required for the ranging system because of the small size of models used in the basin test, and high frequency is employed. By this system, coordinates of maximum 16 points can be determined at an accuracy of 1 mm.