Dynamic characteristics of an oil-lubricated spiral-grooved journal bearing are theoretically investigated in this paper with considering the effect of cavitation occurrence in the bearing clearance. The Reynolds equation by cooperating with a cavitation theory called ‘equivalent flow model’ as a formulation for cavitation occurrence is expanded by perturbation scheme with respect to the journal eccentricity, so that the dynamic bearing characteristics, such as bearing stiffnesses and damping coefficients, are calculated from the obtained results of perturbed pressure distributions. It is shown that, when the cavitation occurrence is considered, the value of the direct bearing stiffness becomes larger, while those of the cross-coupling bearing stiffness and damping coefficients become smaller, compared with those with neglecting the contribution of the cavitation occurrence. Stable operating limits against ‘half-frequency whirl’ are discussed as well, showing that the critical mass values become larger when considering the cavitation occurrence than those with neglecting it.