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Smooth Particle Hydrodynamics (SPH) is an accurate method in fluid numerical simulation. In this paper we introduce a calculating algorithm based on the SPH, and propose an interactive method to simulate fluids with free surfaces. This method is completely consistent with the dynamic behavior of a viscous fluid, namely described by Navier-Stokes equations. In addition, for online simulation, we adopt a nearest neighbor search algorithm based the octree to improve the entire computation. Our SPH method allows us to simulate fluid flowing in a tank with the obstruction, and allows us add an external force (e.g. wind). It shows an interaction between the fluid and the obstruction in the natural environment.