•Bubble formation and condensation process injected from a nozzle is studied numerically.•Euler-Euler two-fluid free surface model and species model from are coupled together.•Influence of non-condensable gas is considered.•Bubble shape variation histories are shown in comparison with experiments. Bubble formation and condensation of steam-air mixture vertically injected in a subcooled water pool was simulated, combining thermal phase change model into the two continuous phase free surface model of ANSYS CFX 17.1. Continuous surface force model was used to calculate surface tension force and the influence of non-condensable gas was accounted for by component transportation equation and assumption of interface temperature equal to saturation temperature at local partial steam pressure. The thermal phase change model includes an experimental correlation for liquid side sensible heat transfer. Based on available experiment data from literatures, singular pure steam bubble and steam-mixture bubble in a pool were first simulated to see the predictability of the proposed method and then, the same method was applied to the bubble formation, detachment and condensation process of injected steam air mixture from a nozzle. Bubble dimeter, water subcooling and non-condensable gas concentration studied range from 4.9mm to 50mm, 12K to 40K, and 0 to 31.5% respectively. The results of the computations indicate that the present method can predict very well the bubble formation and condensation both for pure steam case and with non-condensable gas.