This is a numerical study on the time development of surface waves generated by a submerged body moving steadily in a two-layer fluid system, in which a layer of water is underlain by a layer of viscous mud. The fully nonlinear Navier-Stokes equations are solved on FLUENT with the Volume-of-Fluid (VOF) multiphase scheme in order to simulate the free surface waves as well as the water-mud interface waves as functions of time. The numerical model is validated by mimick-ing a reported experiment in a one-layer system before it is applied to a two-layer system, it is found that the presence of bottom mud in a water layer can lead to large viscous damping of the surface waves. For the investigation of the problem systematically, the effects of the Froude number and the mud layer thickness, density and viscosity relative to those of water are evaluated and discussed in detail.