Capillary Underfill (CUF) process has been widely used in flip-chip packaging since it offers significant improvement of the solder joint reliability. This study focuses on the underfill flow behavior of a multi-chip module with a cavity in the laminate substrate designed for heterogeneous integration. In this paper, Computational Fluid Dynamics (CFD) simulation with a threedimensional model is developed to analyze the flow motion of the underfill, while considering several parameters that affect the capillary action. Simulation results are validated with a flow visualization experiment by using transparent glass chips and substrates. The results of time-developing behavior of underfill filling are compared between the simulation and experiment and good agreement is shown. In addition, several factors affecting the capillary action such as surface tension, contact angle, viscosity were evaluated in the CFD analysis. It was revealed that those factors have large influence on the flow and the void formation inside of the cavity. The present analysis is useful for selecting the underfill with optimal material properties for successful filling process.