Nonlinear hydrodynamics of a twin rectangular hull under heave oscillation is analyzed using numerical methods. Two-dimensional nonlinear time-domain solutions to both inviscid and viscous problems are obtained and the results are compared with linear, inviscid frequency-domain results obtained in  to quantify nonlinear and viscous effects. Finite-difference methods based on boundary-fitted coordinates are used for solving the governing equations in the time domain . A primitive-variables based projection method  is used for the viscous analysis and a mixed Eulerian–Lagrangian formulation  for inviscid analysis. The algorithms are validated and the order of accuracy determined by comparing the results obtained from the present algorithm with the experimental results of Vugt  for a heaving rectangle in the free surface. The present study on the twin-hull hydrodynamics shows that at large and non-resonant regular frequencies, and small amplitude of body oscillation, the fluid viscosity does not significantly affect the wave motion and the radiation forces. At low frequencies however the viscosity effect is found to be significant even for small amplitude of body oscillation. In particular, the hydrodynamic force obtained from the nonlinear viscous analysis is found to be closer to the linear inviscid force than the nonlinear inviscid force to the linear inviscid force, the reason for which is attributed to the wave dampening effect of viscosity. Since the wave lengths generated at smaller frequencies of oscillation are longer and therefore the waves could have a more significant effect on the dynamic pressure on the bottom of the hulls which contribute to the heave force, the correlation between the heave force and the wave elevation is found to be larger at smaller frequencies. Because of nonlinearity, the wave radiation and wave damping force remained nonzero even at and around the resonant frequencies – with the resonant frequencies as determined in  using linear potential flow theory. As to be expected, the nonlinear effect on the wave force is found to be significant at all frequencies for large amplitude of oscillation compared to the hull draft. The effect of viscosity on the force, by flow separation, is also found to be significant for large amplitude of body oscillation.