AbstractIn two‐fluid flows, jumps and/or kinks along the interfaces are present in the resulting velocity and pressure fields. Standard methods require mesh manipulations with the aim that either element edges align with the interfaces or that the mesh is sufficiently refined near the interfaces. In contrast, enriched methods, such as the extended finite element method (XFEM), enable the representation of arbitrary jumps and kinks inside elements. Thereby, optimal convergence can be achieved for two‐fluid flows with meshes that remain fixed throughout the simulation. In the intrinsic XFEM, in contrast to other enriched methods, no more unknowns are present in the approximation than in a standard finite element approximation. In this work, the intrinsic XFEM is employed for the simulation of incompressible two‐fluid flows. Numerical results are shown for a number of test cases and prove the success of the method. Copyright © 2008 John Wiley & Sons, Ltd.