In order to predict the water-vapor two-phase flow structure in a fuel bundle of an advanced light water reactor, a large-scale numerical simulation was carried out using a newly developed two-phase flow analysis code and a highly parallel vector supercomputer. Conventional analysis methods such as subchannel codes need composition equations based on the experimental data. In case that there are no experimental data for the advanced light water reactor, therefore, it is difficult to obtain high prediction accuracy. Then, a new analysis method using the large-scale direct numerical simulation of water-vapor two-phase flow was proposed. This paper, describes the predicted results of a large-scale bubbly flow in a narrow square duct. Regarding the mechanism of bubble coalescence and fragmentation the useful knowledge was obtained.