Abstract: To address some drawback in the Euler-based fluid models, this paper presents a physically based fluid simulation algorithm.The proposed algorithm reduces the numerical dissipation through an improved grid configuration and interpolation strategy, and introduces a practical friction mechanism to repel the "Excessively Climbing-up" effect of the fluid near the solid walls.Meanwhile, this algorithm discretizes an equivalent model to implicitly embed the Neumann boundary conditions for sovling the pressure, and modifies the gradient operator to embed the Dirichlet boundary condition, which eliminates the artifacts in the velocity field.At last, the experimental results with comparisons are presented to demonstrate the improvements in efficiency, accuracy and stability of the proposed algorithm.