In the area of underwater vehicle design, the development of highly maneuverable vehicles is presently of interest with their design being based on the swimming techniques and anatomic structure of fish; primarily the undulatory body motions, the highly controllable fins and the large aspect ratio lunatic tail. The tailoring and implementation of the accumulated knowledge into biomimetic vehicles is a task of multidisciplinary nature with two of the dominant fields being actuation and hydrodynamic control. Within this framework, we present here our progress towards the development of a type of biomimetic muscle that utilizes shape memory alloy (SMA) technology. The muscle is presently applied to the control of hydrodynamic forces and moments, including thrust generation, on a 2D hydrofoil. The main actuation elements are two sets of thin SMA wires embedded into an elastomeric element that provides the main structural support. Controlled heating and cooling of the two wire sets generates bi-direction bending of the elastomer, which in turn deflects or oscillates the trailing edge of the hydrofoil. The aquatic environment of the hydrofoil lends itself to cooling schemes that utilize the excellent heat transfer properties of water. The modeling of deflected shapes as a function of input current has been carried out using a thermomechanical constitutive model for SMA coupled with the elastic response of the elastomer. An approximate structural analysis model, as well as detailed FEM analysis has been performed and the model predictions are been compared with preliminary experimental measurements.