This paper presents a methodology and solution procedure of the time-dependent body-fitted coordinate (BFC) method for the analysis of transient, three-dimensional groundwater flow problems characterized by free and moving boundaries. The technique consists of numerical grid generation, time-dependent body-fitted coordinate transformation, and application of the finite difference method (FDM) to the transformed partial differential equations. Based on the time-dependent BFC method, a three-dimensional finite-difference computer code, BFC3DGW, was developed and used to solve two unconfined flow problems. The code was verified by comparing numerical results with analytical solutions for a steady-state seepage problem. In order to demonstrate capability of the method in dealing with flow problems with irregular and moving boundary surfaces, an unconfined well-flow problem was solved by the developed code. Difficulties associated with the free and moving irregular boundary have been successfully overcome by employing this method.