To study interpenetrating network hydrogel system of PAM/PVA, molecular dynamics simulation is made to investigate molecular interaction inside a hydrogel system. Effects of water content on PAM/PVA composite hydrogel performance are studied. It is found that cohesive energy density and binding energy of hydrogel system increase with water content increasing. Meanwhile elastic coefficients, engineering modulus and ductility decreased with increasing of water content. In addition, with analysis of pair correlation function, we found that there are mainly hydrogen bonding interactions between H₂O molecules and surrounding atoms or functional groups. Strengths of hydrogen bonds formed are O_water >O_PVA >O_PAM >N_PAM, which consists with possibility (difficulty) of forming hydrogen bond.