Streamline simulation is developed to simulate waterflooding in fractured reservoirs. Conventional reservoir simulation methods for fluid flow simulation in large and complex reservoirs are very costly and time consuming. In streamline method, transport equations are solved on one-dimensional streamlines to reduce the computation time with less memory for simulation. First, pressure equation is solved on an Eulerian grid and streamlines are traced. Defining the “time of flight”, saturation equations are mapped and solved on streamlines. Finally, the results are mapped back on Eulerian grid and the process is repeated until the simulation end time. The waterflooding process is considered in a fractured reservoir using the dual porosity model. Afterwards, a computational code is developed to solve the same problem by the IMPES method and the results of streamline simulation are compared to those of the IMPES and a commercial software. Finally, the accuracy and efficiency of streamline simulator for simulation of two-phase flow in fractured reservoirs has been proved.