An quasi three-dimensional time-linearized Euler method has been developed to compute unsteady flows around oscillating blades. In the baseline method, unsteady flow is decomposed into a steady flow plus a linear harmonically varying unsteady flow. Both the steady flow equations and the unsteady perturbation equations are solved using a pseudo time-marching method. Based upon this method, a novel nonlinear harmonic Euler method has been developed. Due to the nonlinearity of the aerodynamic governing equations, time-averaging generates extra “unsteady stress” terms. These nonlinear effects are included by a strongly coupled approach between the perturbation equations and the time-averaged equations. Numerical results demonstrate that nonlinear effects are very effectively modelled by the nonlinear harmonic method.