Abstract: A structure grid, multi-block computer code was developed for both compressible and incompressible flow simulations by solving the preconditioned NS(Navier-Stokes) equations with LU-SGS(lower-upper symmetric-Gauss-Seidel) implicit time integration method. The finite volume method was used to discrete the equations on the cell volume with AUSM+(P)(precondition advection upstream splitting method) or central difference scheme. The Chio-Merkle precondition matrix was adopted. Physical and mathematical mechanism of precondition method was analyzed. Computational capabilities were demonstrated through a variety of computations of typical problems in CFD(computational fluid dynamics) area, including inviscid flows in a channel with a bump and driven flows in a two-dimensional square cavity. Results show that stiffness of conventional time iterative method to low speed flows is overcome, and convergence rate is speeded up. Three-dimensional calculations were made of mix-compressed supersonic inlet flows under different flight Mach numbers, attack angles and back pressures. Results indicate that the precondition method can capture shocks accurately, and inlet performance variations characteristics agree well with the theory results.