The response of a fluid moving above a panel to localized oscillation of the panel is predicted using reduced-order modelling (ROM) with the proper orthogonal decomposition technique. The flow is assumed to be inviscid and is modelled with the Euler equations. These non-linear equations are discretized with a total-variation diminishing algorithm and are projected onto an energy-optimal subspace defined by an energy-threshold criterion applied to a modal representation of time series data. Results are obtained for a bump oscillating in a Mach 1.2 flow. ROM is found to reduce the degrees of freedom necessary to simulate the flowfield by three orders of magnitude while preserving solution accuracy. Other observed benefits of ROM include increased allowable time step and robustness to variation of oscillation amplitude. Published in 2002 by John Wiley & Sons, Ltd.