In view of the modeling and the visualizations of 3D sea terrain, the traditional methods cannot achieve the accuracy and the efficiency of interpolations at the same time, and cannot achieve the real-time and realistic rendering. To realize a fast and accurate modeling for 3D digital sea terrain, a demand interpolation algorithm based on neighbor searching is proposed. First, the distribution of points around the point to be interpolated (PTI) is obtained based on the elevation interdependency of neighbor points. Then, different suitable interpolation algorithms are selected to compute the elevation of PTI according to the distribution of its neighbors. Both of the methods above are executed by using the parallel computation of GPU to improve the interpolation speed efficiently. Based on our fast and accurate modeling of sea terrain, a method based on image space is presented to calculate underwater lighting and real-time waving effect. It realizes the efficiency and reality of sea terrain rendering. Experiments show that our methods can not only improve the accuracy and the efficiency of interpolation, but achieve the real-time and realistic rendering for 3D sea terrain.