This research is focused on formulating a new model of entropy production for two-phase flow, including cavitating turbulent flow. In particular, it focuses on the following aspects of the fluid dynamics and the potential contribution of the model to fluid device design. It includes (i) developing a new turbulent entropy model, (ii) a new formula of entropy production rate for two-phase flow including cavitating turbulent flow based on the second law, (iii) applying the technique to study a NACA hydrofoil, and (iv) conducting associated performance analysis of a propeller using post-processing of the CFD results and demonstrating that entropy production of two-phase cavitating flow around the propeller can be correlated to the loss of power output. The first stage consists of formulating the entropy production for laminar channel flow using Gibb’s free energy. This model is validated through the analytically solved Navier-Stokes equations. Subsequently, the single-phase turbulent flow is formulated in a similar manner, but the validations are carried out by comparing the prediction of the model with DNS results. Then, the model of entropy production for two-phase turbulent flow is derived from Gibb’s equation and a version of the Reynolds averaged Navier-Stokes (RANS) equations. The k- ε model is employed to represent the turbulent properties of single phase and two phase flows. A developed inter-phase slip algorithm mixture model is applied to control over coupling of phases. The Rayleigh-Plesset equation is used to model the rate of mass generation of vapour at the inter phase. The standard k-ε turbulence equations are used to describe turbulence in the cavitation flow. The validations of CFD predictions include exploring the force and cavitation characteristics of the NACA 4412 hydrofoil section. The application of this entropy production model in engineering design is presented via the comparisons between CFD results and the experimental data for the velocity distributions behind propeller P5168.