A mechanical separation process in a hydrocyclone is described in which disperse water droplets are separated from a continuous diesel fuel phase. This separation process is influenced by droplet-droplet interaction effects like droplet breakup and coalescence resulting in a change of droplet size distribution. A simulation model is developed coupling the numerical solution of the flow field in the hydrocyclone based on computational fluid dynamics with population balances. The droplet size distribution is discretized and each discrete droplet size fraction is assumed to be an individual phase within a multi phase-mixture model. The droplet breakup and coalescence rates are defined as mass transfer rates between the discrete phases by the aid of user-defined functions. All model equations are solved with the CFD software package FLUENT (TM). The investigations show the impact of the cyclone geometry on the coupled population and separation dynamics. Cyclone separators with an optimized geometry show less steep velocity gradients increasing the coalescence rates and improving the separation efficiency. The calculated droplet size distributions at the cyclone overflow and at the underflow show good accordance with experimental data. The basic modeling approach can be extended and adapted to other disperse multiphase flow systems. (C) 2009 Elsevier Ltd. All rights reserved.