An analysis based on an interacting boundary-layer theory is presented for the prediction of transonic shockwave/boundary-layer interaction with emphasis on turbulent separated flow. In this analysis, finite difference techniques are used to iteratively solve the viscous layer equations, expressed in a defect form, coupled to a stream function representation of the in viscid flow. Normal pressure gradients and imbedded shock effects are included in this analysis. Favorable comparisons obtained with the separated flow data of Kooi demonstrate that, for transonic shock-induced separation, the effect of displacement thickness interaction dominates over that produced by imbedded shock effects and normal pressure gradients. Calculations made with a modified algebraic turbulence model demonstrate that, for separated flow cases, the computed results are more sensitive to the turbulence model than to whether or not normal pressure gradients are included.