This chapter describes a new, fully nonlinear simulation method for ship motions and loads based on potential theory. On the hull surface, it uses a panel mesh fixed to the body, whereas on the free surface the mesh is generated anew for each time step. Special account is taken of partly submerged hull panels. To improve the accuracy, the panel method determines not only the flow potential, but also its time derivative from derivatives of the boundary conditions. The radiation conditions for the disturbance potential are satisfied using a combination of the Dawson operator for lengthwise derivatives and wave damping, leaving the potential of the incoming waves unaffected. The chapter comprises also a comparison of motions and loads in steep head and quartering waves computed by this method with results of model experiments and RANS calculations.