An Obstacle Avoidance System(OAS) of Underwater Vehicle(UV) in diving and steering plane is investigated. The concept of Imaginary Reference Line(IRL), which acts as the seabed in the diving plane, is introduced to apply the diving plane avoidance algorithm to the steering plane algorithm. Furthermore, the distance to the obstacle and the slope information of the obstacle are used for more efficient and safer avoidance. As for the control algorithm, the sliding mode controller is adopted to consider the nonlinearity of the equations of motion and to get the robustness of the designed system. To verify the obstacle avoidance ability of the designed system, numerical simulations are carried out on the cases of some presumed three-dimensional obstacles. The effects of the sonar and the clearance factor used in avoidance algorithm are also investigated. Through these, it is found that the designed avoidance system can successfully cope with various obstacles and the detection range of sonar is proven to bea significant parameter to the performance of the avoidance.