Aiming at an obstacle avoidance problem with dynamic constraints for Unmanned Surface Vehicle (USV), a method based on Circle Grid Trajectory Cell (CGTC) is proposed. Firstly, the ship model and standardization rules are constructed to develop and constrain the trajectory, respectively. Secondly, by analyzing the properties of the circle grid, the circle grid tree is produced to guide the motion of the USV. Then, the kinematics and dynamics of the USV are considered through the on-line trajectory generator by designing a relational function that links the rudder angle, heading angle, and the central angle of the circle grid. Finally, obstacle avoidance is achieved by leveraging the on-line trajectory generator to choose a safe, smooth, and efficient path for the USV. The experimental results indicate that the proposed method can avoid both static and dynamic obstacles, have better performance in terms of distance cost and steering cost comparing with the related methods, and our method only takes 50% steering cost of the grid-based method; the collision avoidance path not only conforms to the USV dynamic characteristic but also provides a reference of steering command.