This study aims to develop an adaptive mesh refinement (AMR) algorithm combined with Cut-Cell IBM using two-stage pressure�velocity corrections for thin-object FSI problems. To achieve the objective of this study, the AMR-immersed boundary method (AMR-IBM) algorithm discretizes and solves the equations of motion for the flow that involves rigid thin structures boundary layer at the interface between the structure and the fluid. The body forces are computed in proportion to the fraction of the solid volume in the IBM fluid cells to incorporate fluid and solid motions into the boundary. The corrections of the velocity and pressure is determined by using a novel simplified marker and cell scheme. The new developed AMR-IBM algorithm is validated using a benchmark data of fluid past a cylinder and the results show that there is good agreement under laminar flow. Simulations are conducted for three test cases with the purpose of demonstration the accuracy of the AMR-IBM algorithm. The validation confirms the robustness of the new algorithms in simulating flow characteristics in the boundary layers of thin structures. The algorithm is performed on a staggered grid to simulate the fluid flow around thin object and determine the computational cost. © 2019, © 2019 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.