A finite difference method is developed for computing the two-dimensional transient potential flow generated by an impulse on the free surface. Both the dynamic and kinematic free surface conditions are considered in nonlinear version. the primary features of the present paper include the use of special coordinates transformations so that the geometry of the flow field is transformed into a time-invariant region, presents an iteration process, by which the velocity potential is computed as the solution of a Poisson equation, the application of fast Fourier transform (FFT) technique results in a tri-diagonal system of equations which can be readily solved by the Thomas algorithm, the computing time is significantly reduced. Thus an efficient technique for handling the transient potential problems is well justified. The feasibility of the present method has been verified by two examples including different initial disturbances respectively.