Recent developments in technology have contributed significantly to the selection of waterjets as a lightweight, efficient, and reliable propulsion system for high-speed planing crafts, hydrofoils, and surface effect ships (SES). The excellent takeoff thrust capability, simple arrangement with the engine and power transmission, low susceptibility to high-speed collison damage, and low waterborne acoustics are some of the design features that have made the waterjet an extremely attractive marine propulsion system. This paper describes the waterjet optimization analysis necessary to achieve vehicle design thrust, speed, and range for a given gross weight with optimum propulsive efficiency, maximum obtainable payload, or minimum total propulsion system and fuel weights. The sensitivity of vehicle performance to waterjet system parameters are identified. Significant technology developments in the axial flow inducer pump that has led to its selection for the Jetfoil waterjet and for the SES waterjet application are also described.