Phenomena of cavitation and two phase flow are often occurred in hydrodynamic bearings， and have an influence in the static and dynamic characteristics of the waterlubricated bearing.A drag model about a large number of nanobubbles was built based on statistical physics and multifluid theory，and a hydrodynamic lubrication theoretic model with nanobubbles of two phase flow was set up.The circumferential pressure,cavitation bubble number distribution and static and dynamic characteristics of waterlubricated bearing were solved by using finite difference method.The effect of cavitation and two phase flow on the static and dynamic characteristics of waterlubricated bearing were analyzed.The results show that bearing capacity and attitude angle are all increased under cavitation condition compared with Reynolds boundary condition，and the dynamic stiffness and damping coefficient are also increased in different extend.