A power generating and propelling system of a vessel has an electric power generating device (10) installed between an internal combustion engine (2) and a transmission (3). A stator (11) of the generating device (10) is built in a flywheel housing (21a) of the internal combustion engine (2) or a casing (10a) connected to the flywheel housing (21a). A rotary shaft of the generating device (10) is disposed coaxially or eccentrically parallel to a crankshaft (2a) of the internal combustion engine (2) or an input shaft (3a) of the transmission (3) in the same direction with the crankshaft (2a) of the internal combustion engine (2).