In this paper a new type of transient multidimensional two-fluid model has been applied to simulate intermittent or slug flow problems. Three different approaches to modelling interfacial friction, including an interfacial tracking scheme, have been investigated. The numerial method is based on an implicit finite difference scheme, solved directly in two steps applying a separate equation for the pressure, 2D predictions of Taylor bubble propagation in horizontal and inclined channels have been compared with experimental data and analytical solutions. The 2D model has also been applied to investigate a number of special phenomena in slug flow, including slug initiation, bubble turning in downflow and the bubble centring process at large liquid flow rates.KEY WORDS.