In this study, three-dimensional computational fluid dynamics simulation was adopted to evaluate the valve-induced water hammer phenomena in a typical tank-pipeline-valve-tank system. Meanwhile, one-dimensional analysis based on method of characteristics was also used for comparison and reference. As for the computational fluid dynamics model, the water hammer event was successfully simulated by using the sliding mesh technology and considering water compressibility. The key factors affecting simulation results were investigated in detail. It is found that the size of time step has an obvious effect on the attenuation of the wave and there exists a best time step. The obtained simulation results have a good agreement with the experimental data, which shows an unquestionable advantage over the method of characteristics calculation in predicting valve-induced water hammer. In addition, the computational fluid dynamics simulation can also provide a visualization of the pressure and flow evolutions during the transient process.