A dynamic Monte Carlo simulation (MCS) program was developed to discribe the processes of interfacial modification of materials by ion beam mixing and applied to the bilayer and multilayer Al/Pd system. For the bilayer system, the MCS results for the dependence of the mixing rate on the film thickness of top layer (Al) show that the optimum film thickness for ion beam mixing corresponding to the mean damage depth in the Al layer. The dynamic MCS results show that the number of moved Pd atoms is larger than that of Al for small Al overlayer thickness due to collisional nature. In the case of multilayer system, the mixing rate depends on the structure of the multilayered system, and differs from the bilayered system. The mixing rate has a maximum value at the second interface with no dependence on structure. The maximum mixing rate for the multilayer system is larger than that of the bilayer system by a factor of 2. The energy deposition due to the nuclear collisions at the interface and the total number of intermixed atoms across the interface are found to play an important role for these interfacial mixing characteristics.