AbstractThe fundamental problem of biomagnetic fluid dynamics (BFD) in a 2D rectangular channel is numerically studied. The physical problem is described by a coupled, non‐linear system of partial differential equations, with appropriate boundary conditions. For the mathematical formulation, the stream function–vorticity formulation is used and the numerical solution is obtained by developing a pseudotransient numerical technique. A boundary condition for the vorticity is also constructed and grid stretching is used. The efficiency of the method is verified by comparison with other results documented in the literature. New results are also obtained for high values of the magnetic number which is the dominant factor for the determination of the flow field in biomagnetic fluid flow problems. Copyright © 2007 John Wiley & Sons, Ltd.