Airlift reactors have been used widely in many industrial processes, but little work has been conducted on such reactors integrated with internals. In this study, a novel airlift reactor with a funnel internal was developed to achieve better flow conditions and advantages in biological processes. The CFD (computational fluid dynamics) simulation method was employed to investigate the effect of the funnel internals on hydrodynamic properties in the reactor. A CFD model was developed for gas-liquid two-phase flow simulation in a bench-scale reactor. Grid-independent simulation results were verified with global-scale experimental data. The results showed that the local or global gas holdup could be enhanced by 15% and that turbulent kinetic energy could be reduced by a maximum of 7.8% when the superficial gas velocity was 1 cm/s. These features are beneficial for applications in stress-sensitive biological processes. (C) 2011 Elsevier Ltd. All rights reserved.