Ionic polymer–metal composite (IPMC) actuators have shown promise as miniature underwater propulsors due to their high flexibility, reduced weight, and low activation voltage and power consumption. In this paper, we analyze the hydrodynamics of a vibrating IPMC actuator in an aqueous environment in order to develop a comprehensive understanding of thrust generation mechanisms of IPMC actuators. More specifically, we numerically analyze the flow of a viscous fluid generated by a cantilever IPMC actuator vibrating along its fundamental mode shape. We compute the thrust produced by the actuator as a function of its frequency of oscillation and maximum tip displacement. We show that thrust generation of vibrating IPMC actuators is highly correlated with vortex shedding. We find that vorticity production is prominent at the IPMC tip and increases as the oscillation frequency increases. We analyze the lateral force and the moment exerted by the IPMC on the surrounding fluid. Further, we study the power transferred by the vibrating IPMC to the encompassing fluid. We validate our numerical findings through available particle image velocimetry experiments.