In this paper, we present a new multibody physics simulation framework that utilizes the subsystem-based struc-ture and the Alternating Direction Method of Multiplier (ADMM). The major challenge in simulating complex high degree of freedom systems is a large number of coupled con-straints and large-sized matrices. To address this challenge, we first split the multibody into several subsystems and reformulate the dynamics equation into a subsystem perspective based on the structure of their interconnection. Then we utilize ADMM with our novel subsystem-based variable splitting scheme to solve the equation, which allows parallelizable and modular architecture. The resulting algorithm is fast, scalable, versatile, and converges well while maintaining solution consistency. Sev-eral illustrative examples are implemented with performance evaluation results showing advantages over other state-of-the-art algorithms.