Abstract: The objective of the paper is to present a new risk-analysis approach for the assessment of optimal flood protection levels in urban flood risk management, which is based on an active contour method. Although the active contour method is a very popular research topic, there has been no attempt made on deriving a model for simulating flooding and inundating to date, as far as we are aware. We have developed a flooding prototype system, which consists of two main parts: a digital terrain model and a flood simulation model. The digital terrain model is constructed using real world measurement data of GIS, in terms of digital elevation data and satellite image data. A pyramidal data arrangement structure is used for dealing with the requirements of terrain details with different resolutions. A new flooding model has been developed, which is useful for urban flood simulation. It consists of a flooding image spatial segmentation based on an active contour model, a water level calculation process, a standard gradient descent method for energy minimisation. When testing the 3D flood simulation system, the simulation results are very close to the real flood situation, and this method has faster speed and greater accuracy of simulating the inundation area in comparison to the conventional 2D flood simulation models.