Abstract: A two-dimensional moving mesh algorithm is developed to simulate the general motion of two rotating bodies with relative translational motion. The grid includes a background grid and two sets of grids around the moving bodies. With this grid arrangement rotational and translational motions of two bodies are handled separately, with no complications. Inter-grid boundaries are determined based on their distances from two bodies. In this method, the overset concept is applied to hybrid grid, and flow variables are interpolated using a simple stencil. To evaluate this moving mesh algorithm unsteady Euler flow is solved for different cases using dual-time method of Jameson. Numerical results show excellent agreement with experimental data and other numerical results. To demonstrate the capability of present algorithm for accurate solution of flow fields around moving bodies, some benchmark problems have been defined in this paper.