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In this paper, the iterative coupling approach is proposed for applications to solving multiphase flow equation systems in reservoir simulation, as it provides a more flexible time-stepping strategy than existing approaches. The iterative method decouples the whole equation systems into pressure and saturation/concentration equations, and then solves them in sequence, implicitly and semi-implicitly. At each time step, a series of iterations are computed, which involve solving linearized equations using specific tolerances that are iteration dependent. Following convergence of subproblems, material balance is checked. Convergence of time steps is based on material balance errors. Key components of the iterative method include phase scaling for deriving a pressure equation and use of several advanced numerical techniques. The iterative model is implemented for parallel computing platforms and shows high parallel efficiency and scalability.