The powder injection molding (PIM) combines the thermoplastic and powder metallurgy technologies to manufacture intricate parts to nearly shape. The powder segregation is a special effect arising in PIM different from than the pure polymer injection. The two-fluid flow model is used to describe the flows of binder and powder so as to realize the prediction of powder segregation effect in PIM injection. To take into account binder–powder interaction, the mixture model of inter-phase exchange term is introduced in the two-fluid model. The two-fluid equations largely resemble those for single-fluid flow but are represented in terms of the mixture density and velocity. The volume fraction for each dispersed phase is solved from a phase continuity equation. As the key to calculate the phase exchange term, the drag coefficient is defined as a function of mixture viscosity. The effective viscosity of binder and powder are agreed with the additive principle. The volume fractions of binder and powder give directly the evolution of segregation during the injection course. Segregation during PIM injection was simulated by software CFX and results were compared with experimental data with good agreement. The basic reasons that caused segregation are identified as boundary effect, differences in density and viscosity of binder and powder. The segregation zones are well predicted. This showed that the two-fluid model is valid and efficient for the prediction of the segregation effects in PIM injection.