This article presents a comprehensive review of numerical methods and models for interface resolving simulations of multiphase flows in microfluidics and micro process engineering. The focus of the paper is on continuum methods where it covers the three common approaches in the sharp interface limit, namely the volumeof-fluid method with interface reconstruction, the level set method and the front tracking method, as well as methods with finite interface thickness such as color-function based methods and the phase-field method. Variants of the mesoscopic lattice Boltzmann method for two-fluid flows are also discussed, as well as various hybrid approaches. The mathematical foundation of each method is given and its specific advantages and limitations are highlighted. For continuum methods, the coupling of the interface evolution equation with the single-field Navier-Stokes equations and related issues are discussed. Methods and models for surface tension forces, contact lines, heat and mass transfer and phase change are presented. In the second part of this article applications of the methods in microfluidics and micro process engineering are reviewed, including flow hydrodynamics (separated and segmented flow, bubble and drop formation, breakup and coalescence), heat and mass transfer (with and without chemical reactions), mixing and dispersion, Marangoni flows and surfactants, and boiling.