Even though most published results detailing damper behavior consider only the liquid phase, the cavitation process in the lubricant film, when it happens, is critical for the damper's performance. A number of modeling approaches, such as the half-Sommerfeld and Elrod models, were proposed in order to account for the effects of cavitation on the pressure generation, without directly simulating the cavitation process. Based on the experimental data, a few other homogeneous cavitation models have also been developed. All these models are based on the classical Reynolds equation. In this article, a three-dimensional numerical model is developed and validated in connection with the operation of a two-phase squeeze-film damper. The full Navier-Stokes equations (NSE), coupled with a homogeneous cavitation model, is solved to simulate the flow of the two-phase lubricant film and the associated pressures. The pressure variation on the journal surface and the gas concentration distribution in the lubricating fluid (cavitated region) will be presented. The damping coefficients predicted by the NSE model are compared to the ones that resulted from the application of the Reynolds equation.