A local block refinement procedure for the efficient computation of transient incompressible flows with heat transfer is presented. The procedure uses patched structured grids for the blockwise refinement and a parallel multigrid finite volume method with colocated primitive variables to solve the Navier-Stokes equations. No restriction is imposed on the value of the refinement rate and non-integer rates may also be used. The procedure is analysed with respect to its sensitivity to the refinement rate and to the corresponding accuracy. Several applications exemplify the advantages of the method in comparison with a common block structured grid approach. The results show that it is possible to achieve an improvement in accuracy with simultaneous significant savings in computing time and memory requirements. Copyright © 2002 John Wiley & Sons, Ltd.