With the increasing stringency of the Energy Efficiency Design Index (EEDI) requirements, improving the efficiency of the propeller has emerged as a significant challenge in the development of eco-friendly ships. Cavitation inevitably occurs, and it reduces the hydrodynamic performance of the propeller and erodes the blade surface, leading to increased fuel consumption. Therefore, reducing cavitation is crucial for ships to meet the EEDI requirement. This paper investigates the fatigue life and hydrodynamic performance of the propeller under different cavitation numbers and speeds. The relationship between propeller fatigue life and propulsion efficiency under cavitation conditions is explored. In simulation, the Schnerr–Sauer theoretical model is employed as the cavitation model. The nominal stress method (S-N method) is used to calculate the blade fatigue strength. The KP957 propeller is taken as the research object. The hydrodynamic performance of the propellor under different cavitation numbers is studied by means of the finite volume method. The surface pressure and wall shear stress of the blade within the cycle are calculated, and they are conveniently loaded in the dynamic process to calculate the stress and strain of the propeller using the finite element method. Subsequently, the fatigue life of the propeller is determined based on the S-N curve of the blade material. The validity of the study is established by comparing the cavitation results with the experimental results from the Korean Ocean Engineering Research Institute (KORDI) for the KS1295 ship at a speed of 15.7 knots, where the cavitation number in the wake field is 2.5553, and a good consistency is obtained. The findings emphasize the significant impact of cavitation on blade service life and vibration.