The liquid-liquid two-phase flow in a coaxial micro-channel was investigated by computational fluid dynamics (CFD) simulations and online microscope. A modified level set method was used to simulate the free-surface flow. Two flow patterns, dripping flow and jetting flow were both successfully simulated. The experimentally recorded video for droplet formation is in good agreement with the simulation results. The flow pattern transition and droplet size variation were then investigated by changing the two phase viscosities and velocities. The simulated pressure distribution and velocity field for both the dripping and jetting flow revealed the dynamics of the droplet formation process. The pressure change at the dispersed phase entrance during a droplet formation period was studied based on the simulation results, which has not yet been reported in the literature to our knowledge. The simulated pressure of dripping flow was then compared to experimental measurement and good agreement was obtained. The simulation results further revealed the intrinsic difference between the dripping and jetting flow. Numerical simulation provides a supplementary method to study the details in the microscale flow, which is difficult to be studied by experiments. (C) 2015 Elsevier Ltd. All rights reserved.