The interaction mechanism between the plasma and liquid is a key problem for the electrothermal chemical launch technology. To investigate this problem, a simulated experiment for the expansion process of a plasma jet in the working fluid is carried on. Based on this experiment, a two-dimensional axisymmetric unsteady theoretical model is established to reveal the plasma-liquid interaction flow field pattern. The results show that a typical Taylor cavity forms as the plasma jet expands in liquid. The induction effect of the stepped-wall structure enhances the radial expansion of the plasma jet. An arc-shaped pressure wave is generated at the front of the plasma jet and then evolves into the plane wave. A high-pressure area forms at the head of the plasma jet and then moves downstream. There is a strong plasma-liquid turbulent mixing at the interface, especially near the steps and the nozzle exit area.