The finite-difference time-domain (FDTD) recurrence expressions are formulated, and the numerical algorithm developed for underwater acoustic scattering applications, based upon the basic motion equation and the equation of continuity. The boundary condition implementation for both soft and rigid surfaces, and the absorbing boundary conditions on the truncating surface are described. The algorithm simulates the sound wave propagation in the time domain. As the time-stepping proceeds, boundary conditions are satisfied naturally. The method is particularly suited for scattering from complex objects. Near-field distributions of waves scattered from cylinders with ideal boundary conditions, insonified by a plane incident wave, are first computed. Far-field directional patterns are then derived using a Fourier transform method. The method is then applied to some other objects, including a square cylinder with an arbitrary aspect angle, and wedges with either ideally soft or ideally rigid surfaces. A good agreement between the FDTD and the theoretical results is demonstrated, showing the potential of the method in the studies of underwater scattering problems.