In order for ship to reach determined constant speed it is necessary to accomplish thrust force. Magnitude of this force is dependent of resistance. It is achieved, in general, from power source on board within the system called ship’s propulsion system. This system consists of propulsion engine, motor or turbine, shaft line, screw propeller and if necessary gearbox. Even though diesel engines are used on most ships due to economic reasons, we can find steam and gas turbines, electromotor and its combinations. Diesel-electric propulsion systems are applied on ships with high demands for electrical consumption, good maneuverability and frequent speed changes such as on passenger ships, ferries, tugs, icebreakers, pipeline and cable laying vessels and platforms. Although the application of the diesel-electric propulsion system on ships assumes four-stage energy conversion, and thus greater energy loss, contemporary solutions are from exploitation point of view becoming superior solution to the most commonly used diesel-motor propulsion system. This is reflected in lower fuel consumption and emissions of hazardous gases, greater safety and maneuvering performance of ship as well as lower noise and vibration levels. The purpose of this paper is to provide an insight into the performance and structure of the diesel-electric drive system, with emphasis on its exploitation flexibility.