A new implementation for the volume of fluid model with finite volume method is applied to simulate two-phase flow involving nano-particles. The model is used to investigate the laminar flow utilizing nanofluids in a lid-driven cavity. The fluid in the cavity is a water-based nanofluid containing Cu, CuO or Al2O3 nano-particles. The effects of adding extra phase (solid phase) and solid volume fraction for different nanofluids on hydrodynamic characteristics are investigated. The effective density and viscosity of nano-particles are calculated by Chon and Brinkman models, respectively. The CFD model is validated for laminar flow and the results showed good agreement with available numerical data. Then the model is tested for liquid and nano-particles where the results indicate that the effects of solid volume fraction approximately depend strongly on the effective density sequentially for Al2O3, CuO and Cu. In addition the effective viscosity has less effect on the flow field