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The oil-water interface changes dynamically as oil is produced. The dynamic analysis of oil-water interface is the key to oil stabilization and water control in Shunbei oilfield. This paper presents a way to investigate oil-water interface behavior by using dynamic data. In this paper, we validated this method available with the actual data. Sensitivity analyses about the effects of the main parameters are also presented in detail. The water breaking time of oil wells is fully investigated. The oil-water interface movement chart under different development conditions is established to predict the oil-water interface in the late stage of oil well production and extend the waterless developing period. Being based on this chart, a water breakthrough warning can be realized, and oil recovery can be improved. The findings of the research have led to the conclusion that the rising speed of oil-water interface is proportional to the production rate, on the contrary, it is inversely proportional to cave volume and initial oil-water volume ratio. This method is not only suitable for any well type; but also has the function of calculating the real-time oil-water interface of multi-wells. This method can be further developed as its great applicability in fracture-cavity reservoir.