The lattice Boltzmann method (LBM) is extended to include the effects of interfacial tension and its dependence on temperature and is applied to the problem of buoyancy-driven flow in a non-isothermal two-phase system. No a priori assumptions are made regarding the shape and dynamic roles of the interface. The behavior of interface is obtained as part of the solution of the lattice Boltzmann equations. A parametric study of the effects of thermally induced density change, buoyancy, surface tension variation with temperature on interface dynamics, flow regimes and heat transfer is presented. © 2005 Elsevier Inc. All rights reserved.