Bleeding simulation is important components of a surgical simulator. However, realistic simulation of bleeding is a challenging problem. There are several fluid flow models described in the literature, but they are computationally slow and do not satisfy real-time requirement of a surgical simulator. The paper introduce a bleeding simulation algorithm based on the particle system and implement arterial squirting blood, blood splashes in free space, blood drops running down a surface. This algorithm calculates how many blood particles are needed to model a particular instance of bleeding, and assigns a velocity to each particle in a gravitational field so that particles flow out of the injured region at the proper rate. The key characteristics of our algorithm are a visually realistic display and real-time computational performance. Experiment results show that proposed method is feasible and effective. In addition, this algorithm can also be used to simulate water irrigation and smoke effect in virtual surgery simulator.