A fully nonlinear irregular wave tank has been developed using a three-dimensional higher-order boundary element method (HOBEM)in the time domain. The Laplace equation is solved at each time step by an integral equation method. Based on image theory, a new Green function is applied in the whole fluid domain so that only the incident surface and free surface are discretized for the integral equation. The fully nonlinear free surface boundary conditions are integrated with time to update the wave profile and boundary values on it by a semi-mixed Eulerian–Lagrangian time marching scheme. The incident waves are generated by feeding analytic forms on the input boundary and a ramp function is introduced at the start of simulation to avoid the initial transient disturbance. The outgoing waves are sufficiently dissipated by using a spatially varying artificial damping on the free surface before they reach the downstream boundary. Numerous numerical simulations of linear and nonlinear waves are performed and the simulated results are compared with the theoretical input waves.