Gas-liquid flow in microchannels is of fundamental importance to many engineering applications involving microreactors, monolith reactors, microheat exchangers, and several other microfluidic devices. Slug flow, characterized by motion of long bubbles, also referred to as Taylor bubbles, is the most important of the different two-phase flow regimes observed in microchannels. In this work, the formation of bubbles and their rise in circular capillaries in the Taylor flow regime is investigated by using the volume-of-fluid method. The dynamics of formation and rise of Taylor bubbles in glass capillaries of 1, 0.5, 0.75, and 0.3 mm diameter for air-water and air-octane systems was simulated. The effects of superficial gas and liquid velocities, channel geometry (nozzle wall thickness, nozzle diameter, capillary diameter), wall adhesion (contact angle), and fluid properties (surface tension, viscosity) oil the dynamics of bubble formation were investigated. The predicted bubble shapes and bubble formation periods were validated using the experimental data reported by Salman et al. (Salman, W.; Gavriilidis, A.; Angeli, P. Chem. Eng. Sci. 2006, 61, 6653-6666) for a wide range of experimental parameters. Such experimentally validated computational flow models will be useful to simulate the mass transfer and reactions in microcapillaries/channels.