A coupled volume-of-fluid and level set (VOSET) method, which combines the advantages and overcomes the disadvantages of VOF and LS methods, is presented for computing incompressible two-phase flows. In this method VOF method is used to capture interfaces, which can conserve the mass and overcome the disadvantage of nonconservation of mass in LS method. An iterative geometric operation proposed by author is used to calculate the level set function ϕ near interfaces, which can be applied to compute the accurate curvature κ and smooth the discontinuous physical quantities near interfaces. By using the level set function ϕ the disadvantages of VOF method, inaccuracy of curvature and bad smoothness of discontinuous physical quantities near interfaces, can be overcome. Finally the computing results made with VOSET method are compared with those made with VOF and LS methods.