This paper presents a mathematical approach for the simulation of rotor-fuselage aerodynamic interaction in helicopter aeroelasticity and flight dynamics applications. A Lagrangian method is utilised for the numerical analysis of rotating blades with nonuniform structural properties. A matrix/vector-based formulation is developed for the treatment of elastic blade kinematics in the time-domain. The combined method is coupled with a finite-state induced flow model, an unsteady blade element aerodynamics model, and a dynamic wake distortion model. A three-dimensional, steady-state, potential flow, source-panel method is employed for the prediction of induced flow perturbations in the vicinity of the fuselage due to its presence in the free-stream and within the rotor wake. The combined rotor-fuselage model is implemented in a nonlinear flight dynamics simulation code. The integrated approach is deployed to investigate the effects of rotor-fuselage aerodynamic interaction on trim performance, stability and control derivatives, oscillatory structural blade loads, and nonlinear control response for a hingeless rotor helicopter modelled after the Eurocopter Bo105. Good agreement is shown between flow-field predictions and experimental measurements for a scaled-down isolated fuselage model. The proposed numerical approach is shown to be suitable for real-time flight dynamics applications with simultaneous prediction of structural blade loads, including the effects of rotor-fuselage aerodynamic interaction.