Simulation of a system which includes flexible wall boundaries and free-surface problem is challenging problem and it is not easy to obtain reasonable simulation results. An advanced FSI method using 2-way coupled simulation between Multi Flexible Body Dynamics (MFBD) and Particle-based CFD is introduced in this study. MFBD is a technology to analyze the dynamic behavior of systems which include both rigid bodies and flexible bodies. It combines with MBD (Multi-Body Dynamics) to analyze the motion of rigid bodies and FEM (Finite Element Method) to analyze the motion, stresses, and deformation of flexible bodies. A particle based CFD method, MPS (Moving Particle Simulation) represents the fluid as a collection of particles and simulate the movement of incompressible fluids precisely and stably. Because free-surface problem is solved by moving particle, it doesn’t need additional treatment for non-linear wall motion and displacement of flexible node on time domain. For coupled simulation, displacement of rigid body and flexible nodes are calculated by MFBD solver and transfer to MPS solver. Then MPS solver calculate flow field based on modified wall boundaries and calculate force and torque that used for external boundaries of MFBD solver. With the 2-way coupled FSI simulation, the coupled interaction between the rigid/flexible bodies and the fluids can be simulated easily and accurately. In this study, the 2-way coupled FSI simulation was validated with simple experiments and applied to simulation of a mechanical system which includes a flexible wall boundary and complex free surface flow. Firstly, the 2-way coupled simulation results were validated by comparing the results of an experimental case that includes dam break and sloshing problems with a flexible plate. The shape of the free surface and displacement of the flexible nodes were compared with experimental data and showed good agreement with them. With the properly developed interface, simulation of FSI problem for practical mechanical was performed.