Dynamic simulation of flexible multibody system with the hydraulic drive is presented for the digging operation of the hydraulic excavator. The energy saving technology is required on the construction machinery design from the present environmental point of view, and the dynamic simulation is useful for the energy saving evaluation. The digging operation of the hydraulic excavator involves the dynamics of linkage system and the hydraulic drive system that includes nonlinear characteristics such as the check valve and so on. New numerical analysis method is presented for the coupling system of the linkage system and the hydraulic system, which consists of the time increment prediction method on piecewise-linear characteristics and the bisection method in Newton method. It is shown that this method is useful for the dynamic simulation of the flexible multibody system with the hydraulic drive by appling to the simulation of digging operation on the hydraulic excavator.