A population balance model (the Inhomogeneous MUSIG model) has recently been developed in close cooperation between ANSYS-CFX and Forschungszentrum Dresden-Rossendorf and implemented into the CFD-Code CFX [Krepper, E., Lucas, D., Prasser, H.-M, 2005. On the modelling of bubbly flow in vertical pipes. Nucl. Eng. Des. 235, 597–611; Frank, T., Zwart, P.J., Shi, J.-M., Krepper, E., Rohde, U., 2005. Inhomogeneous MUSIG Model—a population balance approach for polydispersed bubbly flows, International Conference “Nuclear Energy for New Europe 2005”, Bled, Slovenia, September 5–8, 2005; Krepper, E., Beyer, M., Frank, Th., Lucas, D., Prasser, H.-M., 2007. Application of a population balance approach for polydispersed bubbly flows, 6th Int. Conf. on Multiphase Flow Leipzig 2007, (paper 378)]. The current paper presents a brief description of the model principles. The capabilities of this model are discussed via the example of a bubbly flow around a half-moon shaped obstacle arranged in a 200 mm pipe. In applying the Inhomogeneous MUSIG approach, a deeper understanding of the flow structures is possible and the model allows effects of polydispersion to be investigated. For the complex flow around the obstacle, the general structure of the flow was well reproduced in the simulations. This test case demonstrates the complicated interplay between size dependent bubble migration and the effects of bubble coalescence and breakup on real flows. The closure models that characterize the bubble forces responsible for the simulation of bubble migration show agreement with the experimental observations. However, clear deviations occur for bubble coalescence and fragmentation. The models applied here, which describe bubble fragmentation and coalescence could be proved as a weakness in the validity of numerous CFD analyses of vertical upward two-phase pipe flow. Further work on this topic is under way.