In this paper, we present the findings from a numerical investigation of the droplet formation process in a T-junction microchannel. A volume-of-fluid (VOF) model that is refined with smoothing operations was used to minimise spurious or non-physical velocities at the micro-scale, in order to obtain more accurate velocity results from the microchannel simulations. The model was validated with experimental results and was able to yield a closer match to the experimental data compared to the standard VOF model. Subsequently the refined VOF model was used to investigate the velocity field evolution during the droplet formation process to further understand the underlying physics. For the squeezing regime, we observed regions of large recirculation after droplet break-up with reversed flows. These recirculation regions were also seen in the transition and dripping regimes but reversed flows did not occur. We also studied the effects of varying the dispersed phase flow rate under a constant capillary number (Ca) of the continuous phase. The results show that increasing the dispersed phase flow increases the droplet length and formation frequency. In addition, the frequency of the velocity fluctuation at the junction vicinity was found to coincide with the rate of new droplet formation. Finally, the effects of Weber number on droplet length was also investigated and it was found that inertial forces significantly influence droplet formation, albeit being the least dominant force. (C) 2015 Elsevier Ltd. All rights reserved.