Digital Virtual Manufacturing is a technology facilitating effective product developments and agile productions via digital models representing the physical and logical schema and the behavior of real manufacturing systems. A digital virtual factory as a well-designed and integrated environment is essential for successful applications of this technology. In this research, we construct a sophisticated digital virtual factory for the section steel shop in a Korean shipbuilding company by 3-D CAD and virtual manufacturing simulation. The NIST-AMRF CIM hierarchical model and workflow analysis using IDEF methodology are also applied. This digital virtual factory can be applied for diverse engineering activities in design, manufacturing and control of the real factory, and improvements in quality of engineering and savings in time from design to production in shipbuilding are possible.