This work deals with the development of a numerical method for simulating viscoelastic axisymmetric free surface flow of an Oldroyd B fluid. A novel formulation is developed for the computation of the non-Newtonian extra-stress components on rigid boundaries and on the symmetry axis. The full free surface stress conditions are employed. The resulting governing equations are solved by finite differences on a Marker-and-cell (MAC) type grid. Validation is provided by simulating a pipe flow problem. The classical die-swell problem is solved and swelling ratios are provided. The height of the splash caused by a falling liquid drop for various Reynolds and Weissenberg numbers is then studied, and the height of the splash is shown to diminish with increasing viscoelasticity. (c) 2006 Elsevier B.V. All rights reserved.