A fluid-structure coupled computation code has been developed and applied to a panel flutter problem. The flutter velocities and the amplitudes of limit cycle oscillations obtained using the present method agree well with those of Dowell. It is found that the boundary layer over the panel can suppress flutter particularly in the Mach number region between 1.2 and 1.35, the effect of which increases with viscosity. In a 3D problem, good agreement was obtained between computation and experiment.