In co-simulation, a number of subsystems sharing details of a system, are coupled to exchange data. The subsystem level development of each package enhances the computational efficiency, and more sophisticated packages can be created. However, the data exchange is not always straight forward as different packages can be developed by different research or industrial centers. Therefore, some standards such as Functional Mock-up Interface (FMI) are developed to facilitate the data exchange in co-simulation or co-integration. In this work, the co-simulation approach is employed to investigate the effects of dissolved air on the dynamic performance of a hydraulically driven multibody system. To this end, the subsystems of multibody system dynamics and a hydraulic model are coupled by using the FMU procedure. The utilized FMUs are produced by using an XML model description and a C code for the hydraulic part. The multibody mechanism under investigation is a jib crane model containing three bodies. The model is studied by exciting different sine inputs having known frequencies while varying the amount of dissolved air in the hydraulic system. The results have illustrated that by increasing the amount of entrained air, the pressure amplitude decrease. In addition, the results demonstrated that the amount of the air does not have effects on shifting the system frequency.