This paper presents the detailed modeling and simulation of the dynamic coupling between an autonomous underwater vehicle (AUV) and a manipulator. The modeling processes are described with the incorporation of the most dominating hydrodynamic effects such as added mass, lift and drag forces. The hydrodynamic coefficients are derived using strip theory and are adjusted according to dynamical similarity. A fuzzy decoupling controller (FDC) is proposed for an autonomous underwater vehicle-manipulator system (UVMS) which consists of two subsystems, an underwater vehicle and a manipulator. The proposed controller uses a fuzzy algorithm (FA) to adaptively tune the gain matrix of the error function (EF). The EF is described by the integral sliding surface function. This technique allows the off-diagonal elements developed for decoupling the system to be incorporated in the gain matrix. Tracing the FA and EF back to the principle of feedback linearization, one further obtains evidence about the decoupling and stability of the system. Moreover, a desired trajectory with the consideration of the dynamic coupling of the AUV is designed to reduce the thruster forces and manipulator's torques. This technique provides high performance in terms of tracking error norms and expended energy norms. A major contribution of this study is that it adopts the off-diagonal elements to exploit the dynamic coupling between the degrees of freedom of the subsystem and the dynamic coupling between the two subsystems. Simulation results demonstrate the effectiveness and robustness of the proposed technique in the presence of parameter uncertainties and external disturbances. INDEX TERMS AUV, dynamic coupling, decoupling control, fuzzy algorithm, hydrodynamic effect, underwater manipulator.