This study developed an improved Eulerian model for the simulation of an air-water flow field over stepped spillways. The improved drag model applied different drag coefficients for bubbles and for free surface flows or gas cavities. Void fraction and turbulence correction were used in determining the bubble drag coefficient. The calculated air entrainment and air-water velocity could be adapted using these parameters. With the improved drag model, the Eulerian simulations predicted the location of the inception point, the distributions of air void fraction, velocity distributions, and pressure distributions. The change in the dissolved oxygen (DO) concentration from upstream of the stepped spillways, to downstream, was simulated based on the improved computational fluid dynamics model and the transport equation for DO transferring. The numerical DO concentration coincided with the experimental results. Therefore, the improved CFD model and the numerical methods presented here can provide possible optimization tools for strong air entrainment flows.