This study implemented a multilevel dynamic mesh refinement algorithm to improve the accuracy of transient engine spray simulation. The adaptive scheme is a dynamic process that adapts a coarse mesh by employing local cell division and recovery. During cell refinement, the isotropic division of one hexahedron into eight subcells was performed in three dimensions. In order to treat the hanging nodes that appear at the interface between the divided and undivided cells, an approach for conserving the flux across the interface was implemented. This approach offers flexibilities in handling successive adaptations for efficient data management. A special data structure based on octree was developed that offers high storage efficiency Both solid-cone and hollow-cone sprays under direct-injection gasoline engine conditions were simulated. Predicted spray characteristics using different mesh densities with various refinement levels were compared. Results show that the present refinement scheme can predict similar spray structures as those obtained using the globally fine mesh. A significant computational speed up was achieved by using a relatively coarse mesh with multilevel refinement while maintaining a good level of accuracy in predicting the spray structure.