Dynamics of a moving two-level atom with fine structure interacting with an electromagnetic field is studied. The fine structure increases the damping rate induced by the atomic momentum distribution. When the field is in a Fock state, the Rabi oscillation becomes very complicated; when the field is in a superposition state, the collapse-revival phenomenon disappears for the wider atomic wavepackets. In the presence of the fine structure, each atomic level splits into three sublevels when the field is in a Fock state and the atom has a definite momentum.