SUMMARYA new stream function–vorticity formulation‐based immersed boundary method is presented in this paper. Different from the conventional immersed boundary method, the main feature of the present model is to accurately satisfy both governing equations and boundary conditions through velocity correction and vorticity correction procedures. The velocity correction process is performed implicitly based on the requirement that velocity at the immersed boundary interpolated from the corrected velocity field accurately satisfies the nonslip boundary condition. The vorticity correction is made through the stream function formulation rather than the vorticity transport equation. It is evaluated from the firstorder derivatives of velocity correction. Two simple and efficient ways are presented for approximation of velocity‐correction derivatives. One is based on finite difference approximation, while the other is based on derivative expressions of Dirac delta function and velocity correction. It was found that both ways can work very well. The main advantage of the proposed method lies in its simple concept, easy implementation, and robustness in stability. Numerical experiments for both stationary and moving boundary problems were conducted to validate the capability and efficiency of the present method. Good agreements with available data in the literature were achieved. Copyright © 2011 John Wiley & Sons, Ltd.