In this paper, modeling and simulation of an underwater vehicle equipped with manipulator arms, using a composite rigid body algorithm, will be discussed. Because of the increasing need for unmanned underwater vehicles (UUVs) in oil and gas projects in the Persian Gulf, for doing operations such as inspection of offshore jackets, subsea pipelines, and submarine cables, and also pre-installation survey and post-laid survey of submarine pipelines and cables, design and construction of “SROV” was developed in Sharif University of Technology, and at the design stage behavior of the underwater vehicles was studied. In this paper, an efficient dynamic simulation algorithm is developed for an UUV equipped with manipulators so that each of them has degrees of freedom. In addition to the effects of the mobile base, the various hydrodynamic forces exerted on these systems in an underwater environment are also incorporated into the simulation. The effects modeled in this work are added mass, viscous drag, fluid acceleration, and buoyancy forces. For drag forces, the emphasis here is on the modeling of the pressure drag. Recent advances in underwater position and velocity sensing enable real-time centimeter-precision position measurements of underwater vehicles. With these advances in position sensing, our ability to precisely control the hovering and low-speed trajectory of an underwater vehicle is limited principally by our understanding of the vehicle’s dynamics and the dynamics of the bladed thrusters commonly used to actuate dynamically positioned marine vehicles. So the dynamics of thrusters are developed and an appropriate mapping matrix dependent on the position and orientation of the thrusters on the vehicle is used to calculate resultant forces and moments of the thrusters on the center of gravity of the vehicle. It should be noted that hull-propeller and propeller-propeller interactions are considered in the modeling too. Finally, the results of the simulations, for an underwater vehicle equipped with 1 two degrees of freedom manipulator, are presented and discussed in detail.