The phenomenon of direct-contact condensation, used in steam driven jet injectors, nuclear reactor emergency core cooling systems and direct-contact heat exchangers, was investigated computationally by introducing a thermal equilibrium model for direct-contact condensation of steam in subcooled water. The condensation model presented was a two resistance model which takes care of the heat transfer process on both sides of the interface and uses a variable steam bubble diameter. The injection of supersonic steam jet in subcooled water tank was simulated using the Euler-Euler multiphase flow model of Fluent 6.3 code with the condensation model incorporated. The findings of the computational fluid dynamics (CFD) simulations were compared with the published experimental data and fairly good agreement was observed between the two, thus validating the condensation model. The results of CFD simulations for dimensionless penetration length of steam plume varies from 2.73-7.33, while the condensation heat transfer coefficient varies from 0.75-0.917 MW.(m(2).K)(-1) for water temperature in the range of 293-343 K.