Abstract: In virtual environments, real-time simulation and rendering of dynamic fluids have always been the pursuit for virtual reality research. In this paper, we present a real-time framework for realistic fluid simulation and rendering on graphics processing unit. Because of the high demand for interactive fluids with larger particle set, the computational need is becoming higher. The proposed framework can effectively reduce the computational burden through avoiding the computation in inactive areas, where many particles with similar properties and low local pressure cluster together. While in active areas, the computation is fully carried out; thus, the fluid dynamics are largely preserved. Here, a robust particle classification technique is introduced to classify particles into either active or inactive. The test results have shown that the technique improves the time performance of fluid simulation largely. We then incorporate parallel surface reconstruction technique using marching cubes to extract the surfaces of the fluid. The introduced histogram pyramid-based marching cubes technique is fast and memory efficiency. As a result, we are able to produce plausible and interactive fluids with the proposed framework for large-scale virtual environments. Copyright 2013 John Wiley & Sons, Ltd.