The dynamic development of interfacial structure in two-phase flows has been studied by using the interfacial area transport equations with various bubble interaction mechanisms. The two-group interfacial area transport equations are incorporated into a multiphase computational fluid dynamics code in the framework of the two-fluid model which is modified to use a combined gas momentum equation for two groups of bubbles. A benchmark is performed for adiabatic churn-turbulent and cap-turbulent flows in a confined vertical rectangular duct (20 cm x 1 cm) with newly developed hydrodynamic models for lift and bubble-induced turbulent diffusion forces as well as the bubble-induced turbulence. The benchmark results demonstrate improved predictive capability of the two-fluid model with these hydrodynamic models and the two-group interfacial area transport equations. (C) 2013 Elsevier Ltd. All rights reserved.