The main parameters that affect the flow conditions and intrusion of salt water in an estuary system are tides and the seasonal variation of water discharge. A laterally averaged two-dimensional numerical model called MIKE 11 XZ is used to simulate the hydrodynamics and salinity intrusion of Danshuei River estuarine system. This model can simulate hydrodynamics and water quality in estuaries, reservoirs and lakes. MIKE 11 XZ solves the Reynolds-averaged Navier–Stokes equations by using Abbott–Ionescu finite difference scheme in a non-dimensional vertical σ-coordinate. Vertical eddy diffusivity in the model can be determined by a constant value, a mixing length theory and a k or kɛ turbulence closure scheme with Richardson number correction. A series of comprehensive field data obtained from Danshuei estuarine system is used for evaluation, calibration and verification of the model. The friction coefficient was calibrated and verified using water surface elevation and velocity measurements, respectively. Then the vertical eddy diffusivity was calibrated and verified through comparison of salinity measurements in different layers of several stations. Reasonable agreement was obtained between the model results and the observed data using kɛ turbulence closure scheme. The model application was investigated with different discharges and the effect of discharge variation on salinity intrusion was determined. The results showed that the fresh water discharge is the main parameter that affects the salinity intrusion in this system. Finally, simple power equations are suggested to predict the salinity intrusion due to the fresh water discharge in different tributaries of the system.