Principles of computation are described for a three-dimensional model of estuaries, bays, and coastal seas in which nonisotropic density conditions exist. Numerical integration of the finite difference euqations for motion, transport, and continuity are used. In these equations the vertical momentum exchange is quadratically related to horizontal velocities, and the effects of vertical accelerations are neglected. The computational method has been tested on a number of basins with boundaries of increasing complexity. A computation for a large lake with irregular boundaries and depth with a horizontal grid of 1000 points and 8 layers took 30 minutes on an IBM 360-91 for a real-time simulation of 67 hours in 4000 time steps. Results indicate that three-dimensional flows can be computed effectively according to the method described.