The three-dimensional coextrusion flow of two polymer melts is solved over the die-extrudate region using the finite element method. As elastic recovery is known to be the main source of extrudate swelling, a viscoelastic constitutive model (the Phan-Thien-Tanner or PTT model) is adopted to characterize the rheological behavior of the elastomers. A major challenge in the simulation of multilayer flow inside and outside the die is to update multiple moving surfaces (material interface and extrudate free surface) simultaneously. This difficulty is resolved by introducing a two-step updating algorithm which decouples the iterations of the interface and the free surface. The effects of extrudate swelling and bending on interface deformation are investigated herein, together with the interface shape dependency on flow elasticity. The numerical method is also applied to an industrial profile and the simulation result is in quantitative agreement with the experimental coextrusion data. V C 2016 Wiley Periodicals, Inc. J. Appl. Polym. Sci. 2016, 133, 43522.