In this study, computational fluid dynamics (CFD) simulation of air-water two-phase flow in vertical pipe has been carried out. Wide ranges of superficial liquid and gas velocities, 0.376-3.53 and 0.0036-1.275 m/s, and dispersed phase holdup range from 0.3 to 38.74% is used in the simulation. In this study, for drag, lift, wall lubrication, and turbulent dispersion force the models of Grace, Tomiyama, Hosokawa, and Burns are used, respectively. The Eulerian- Eulerian multiphase approach with the k-omega shear stress transport (SST) turbulence model was used. Bubble diameter is an essential parameter to perform the Eulerian simulation. In the present study, we developed new correlation for bubble diameter and with this predicted bubble diameter simulations were performed. The developed CFD model is well capable of predicting gas void fraction, interfacial area concentration, pressure drop, gas/liquid velocity, and turbulent kinetic energy.