Under an AC electric field, individual particles in close proximity induce spatially non-uniform electric field around each other, accordingly resulting in mutual dielectrophoretic (DEP) forces on these particles. The resulting attractive DEP particle-particle interaction could assemble individual colloidal particles or biological cells into regular patterns, which has become a promising bottom-up fabrication technique for bio-composite materials and microscopic functional structures. In this study, we developed a transient multiphysics model under the thin electric double layer (EDL) assumption, in which the fluid flow field, AC electric field and motion of finite-size particles are simultaneously solved using an Arbitrary Lagrangian-Eulerian (ALE) numerical approach. Numerical simulations show that negative DEP particle-particle interaction always tends to attract particles and form a chain parallel to the applied electric field. Particles usually accelerate at the first stage of the attractive motion due to an increase in the DEP interactive force, however, decelerate until stationary at the second stage due to a faster increase in the repulsive hydrodynamic force. Identical particles move at the same speed during the interactive motion. In contrast, smaller particles move faster than bigger particles during the attractive motion. The developed model explains the basic mechanism of AC DEP-based particle assembly technique and provides a versatile tool to design microfluidic devices for AC DEP-based particle or cell manipulation. (C) 2013 Elsevier Inc. All rights reserved.