This study investigates the formation process of droplets in a Y-junction microchannel using two immiscible fluids: water as the continuous fluid and oil as the dispersed phase. We have examined the influence of the capillary number, flow rate ratio and viscosity ratio between the two fluids; parameters which determine the length and generation frequency of the droplets. Numerical simulations have been performed using the software Ansys Fluent with the interface capture method Volume of Fluid (VOF) for solving the governing equations. Three different algorithms have been tested for the pressure-velocity coupling: SIMPLE, SIMPLEC and PISO. The results are quite similar for SIMPLE and SIMPLEC, however it turned out that PISO is a better algorithm to solve the two-phase flow. Additionally, another Y-junction is coupled in the initial geometry to observe a symmetric breakup of the droplets and their formation is explained using the pressure field and the velocity field.