This paper presents the study of the waterjet cutting mechanism using the Smoothed Particle Hydrodynamics (SPH) method to simulate the process of high-pressure submerged waterjet cutting hard clay with numerical software ANSYS/LS-DYNA. The characteristics of the cutting hole and the propagation of stress wave on clay during the cutting process are discussed. Furthermore, the effect of the waterjet velocity and the impact distance on the cutting depth was analyzed. The results indicate that waterjet cutting forms a V-shaped hole of radius about 10 times the width of the waterjet. When the waterjet velocity becomes lower, the submerged environment has a more significant effect on cutting. The results of the study can provide a reference for improving the high-pressure waterjet cutting mechanism of a trailing suction dredger with preferable engineering research values.