In this paper, the path integral molecular dynamics (PIMD) method has been extended to employ an efficient approximation of the path action referred to as the pair density matrix approximation. Configurations of the isomorphic classical systems were dynamically sampled by introducing fictitious momenta as in the PIMD based on the standard primitive approximation. The indistinguishability of the particles was handled by a pseudopotential of particle permutation that is an extension of our previous one [J. Chem. Phys. 112, 10116 (2000)]. As a test of our methodology for Boltzmann statistics, calculations have been performed for liquid helium-4 at 4 K. We found that the PIMD with the pair density matrix approximation dramatically reduced the computational cost to obtain the structural as well as dynamical (using the centroid molecular dynamics approximation) properties at the same level of accuracy as that with the primitive approximation. With respect to the identical particles, we performed the calculation of a bosonic triatomic cluster. Unlike the primitive approximation, the pseudopotential scheme based on the pair density matrix approximation described well the bosonic correlation among the interacting atoms. Convergence with a small number of discretization of the path achieved by this approximation enables us to construct a method of avoiding the problem of the vanishing pseudopotential encountered in the calculations by the primitive approximation.