Abstract: Based on micro water oil displacement experiment,a two-dimensional micro pore model was established.Characterized by Level Set mathematical method,in combination with N-S equation,a micro two-phase percolation mathematical model was established.By use of the finite element method,the numerical simulation on oil-water displacement was carried out.Therefore,the characteristics of oil-water displacement,the influence of pore heterogeneity,wetting heterogeneity,oil/water two phase viscosity ratio,displacement differential pressure on displacement efficiency were studied.Based on the simulation results such as sweep efficiency of pore fluid,migration velocity of two phase interface,and preferential seepage channel analysis,the Level Setmethod can well deal with the topology change of oil-water two phase interfaces under various factors and provides a new method for oil displacement mechanism and micro twophase seepage characteristics.