A comprehensive three-dimensional model of droplet-gas two-phase flow is presented to examine the evolution of spray along the downstream of the exit orifice in an effervescent atomizer. For gas phase, the Navier-Stokes equations with k-epsilon turbulence model are solved, considering two-way coupling of the interaction between droplets and the gas phase. The dispersed droplet phase is modeled as Lagrangian entities, accounting for the physical phenomena of droplet generation from primary and secondary breakup, droplet collision and coalescence, droplet momentum, and heat transfer. This model is used to calculate the mean size and statistical distributions of atomized droplets under various operating conditions such as air-to-liquid ratio (ALR), injection pressure, liquid flow rate, nozzle exit diameter, and liquid material. The simulation results compare well with the experimental data, with an accuracy of 5% for the atomizer operated under annular flow conditions. Gas flow and spray evolution of the droplets are predicted; effects of operating conditions on the droplet mean size and distributions are discussed. Results show that ALR is one of the most important control parameters. Increasing ALR will decrease the droplet size gradually and finally tend to a certain limitation. A decreasing nozzle exit favors primary breakup, while high injection pressure has more influence on the secondary atomization. An increasing liquid mass flow rate has better primary breakup and worse overall atomization downstream. The liquid properties also have great impact on the droplet atomization. The less the viscosity and surface tension, the easier liquid breaks into smaller drops.