In this work, a new smoothed particle hydrodynamics (SPH)-based model is developed to simulate the removal process of thermal barrier coatings (TBCs) using the abrasive water jet (AWJ) technique. The effects of water jet abrasive particle concentration, incident angle, and impacting time on the fracture behavior of the TBCs are investigated. The Johnson–Holmquist plasticity damage model (JH-2 model) is used for the TBC material, and abrasive particles are included in the water jet model. The results show that the simulated impact hole profiles are in good agreement with the experimental observation in the literature. Both the width and depth of the impact pit holes increase with impacting time. The deepest points in the pit hole shift gradually to the right when a 30-deg water jet incident angle is used because the water jet comes from the right side, which is more effective in removing the coatings on the right side. A higher concentration of abrasive particles increases both the width and depth, which is consistent with the experimental data. The depths of the impact pit holes increase with the water jet incident angle, while the width of the impact holes decreases with the increase in the water jet incident angle. The water jet incident angle dependence can be attributed to the vertical velocity components. The erosion rate increases with the incidence angle, which shows a good agreement with the analytical model. As the water jet incident angle increases, more vertical velocity component contributes to the kinetic energy which is responsible for the erosion process.