A computational fluid dynamics approach to study drag reduction of axisymmetric underwater bodies by air jet injection in the boundary layer is presented. The well-known ‘mixture’ model is used to capture the multiphase flow and the SST k-ω (shear stress transport) turbulence closure model has been used in the computations. Well-studied Afterbody1 (Huang et al., 1978) which has a tapered and smooth stern profile is considered. A companion shape of Afterbody1, which has a blunt stern profile, is also studied. The numerical study is carried out with different air jet velocity to body velocity ratios, various angles of air jet and various angles of attack of the body. Effects of these parameters on drag reduction are reported. The effect of tapered vs. blunt aft shape of Afterbody1 has been found to have significant effect on drag reduction performance. © 2013 Taylor and Francis Group LLC.