Compared with conventional charges, the shaped charge has the ability to penetrate structures accurately. The present work adopts the Arbitrary Lagrangian-Eulerian (ALE) algorithm in LS-DYNA software to investigate the damage mechanism of stiffened cylindrical shells subjected to shaped charge underwater explosion loads, which can overcome the limitations of the existing studies based on simplified local structures and discontinuous computational methods. Numerical simulations indicate that the shock-wave generated by the shaped charge underwater explosion induces negligible plastic strain of the stiffened cylindrical shell at a 0.4 m standoff distance. The shaped charge jet rapidly forms initial penetration openings, while a secondary pressure surge caused by the jet tail contacting the shell enlarges the penetration dimensions. The entrained bubble effects and subsequent expansion of the main bubble body further extend the damage scale through additional pressure loading. Parametric studies with different standoff distances demonstrate that increased standoff distances reduce the penetration diameter of the jet and induce fragmentation. The velocity attenuation during penetration intensifies with larger standoff distances, resulting in significantly diminished residual velocities after penetrating the shell structure.