The wave propagation on free surface caused by the gravity and wall reflection in channels was simulated. In order to obtain movable boundaries on the free surface, the techniques of the moving grids and boundary-fitted coordinate system presented by Thompson were adopted. The solutions were obtained by transforming the irregular physical domain into the regular computational domain. The governing equations of the two-dimensional momentum and continuity equations were solved simultaneously by using the finite difference scheme on non staggered grids. The arbitrary Lagrangian-Eulerian (ALE) kinematic description was applied in the procedure of calculation. The numerical model was verified by experimental data of wave propagation due to a dam failure. As a result, the model was used to simulate and analyse the wave propagation of seiche in channels.