In restricted waters such as harbour, bay or cannal, it is necessary to know the precise manoeuvring characteristics of ship including the effects of water depth, channel bank or the another ships from viewpoint of safety of navigation. In narrow waterways, specially, the effects of channel bank and hydrodynamic interactions between ships are fairly significant. This paper examines hydrodynamic behavior of ships during meeting and passing in narrow water channel, by using slender body theory. Furthermore, ship motions with rudder control during passing in channel by using these hydrodynamic forces are discussed. This paper concludes as follows. (1) During passing, the interaction forces, such as lateral force and yaw moment, between two ships are affected by the differences of ship speed and ship length, and by lateral distance between ships. (2) Lateral force and yaw moment acting on the ship are significant when the another larger ship passes nearby this ship. (3) By simulation study of ship motions, some problems on two way traffic in channel are noted.