Abstract: The method and principle of the fully-implicit simultaneous solution of the two phase flow of water and gas are discussed systematically in this paper.This method deals with the Darcy coefficient and the producing quantity of water and gas in the equations of water and gas phase flow,solves the equations of water and gas phase simultaneously,and works out the values of pressure and saturation implicitly at the same time,for this reason,the convergence speed of the solution is fast,and the solution is stable positively.This method is applied to the prediction of production potentiality of gas and water of 3^# coal bed methane well in Qinshui basin,the result is good.