We present a simple and consistent molecular dynamics algorithm for determining the equilibrium properties of a bulk liquid and its coexisting vapor phase. The simulation follows the dynamics of the two systems simultaneously while maintaining the volume and the number of particles of the composite system fixed. The thermostat can constrain either the total energy or the temperature at a desired value. Division of the extensive properties between the two phases is governed by the difference of the corresponding intensive state variables. Particle numbers are continuous variables and vary only in virtual sense, i.e., the real sizes of the two systems are the same and do not change during the course of the simulation. Calculation of the chemical potential is separate from the dynamics; thus, one can replace the particle exchange step with other method if it improves the efficiency of the code. (C) 2000 American Institute of Physics. [S0021-9606(00)50608-4].