The objective of this work is to develop a finite element model for studying fluid–structure interaction. The geometrically non-linear structural behaviour is considered and based on large rotations and large displacements. An arbitrary Lagrangian–Eulerian (ALE) formulation is used to represent the compressible inviscid flow with moving boundaries. The structural response is obtained using Newmark-type time integration and fluid response employs the Lax–Wendroff scheme. A number of numerical examples are presented to validate the structural model, moving mesh implantation of the ALE model and complete fluid–structure interaction.