A vertical two phase closed thermosyphon is analyzed numerically using the two-fluid methodology within Eulerian multiphase domain. The steadily operating thermosyphon is first simulated using a full scale axi-symmetric model. The model is then used to predict the behaviour of the thermosyphon under different pulsed heat increment conditions. The effects of evaporation, condensation and interfacial heat and mass transfer are taken into account within the two phase domain. The cooling water jacket is also modelled along with the wall of thermosyphon to simulate the effect of conjugate heat transfer between the wall and fluid phase. Results obtained show in detail the overall thermal response of the thermosyphon along with the dynamics of fluid flow within its core. It is established that two-fluid methodology along with the applied techniques can be used effectively for the purpose of simulation of two phase system like a typical thermosyphon.