A novel liquid–liquid cyclone reactor (LLCR) was designed to enhance mixing and accelerate separation between the reaction products and catalyst during isobutane alkylation catalyzed by ionic liquid, and a three dimensional model was used to simulate the process. A Eulerian–Eulerian multiphase flow model and Reynolds Stress Model (RSM) were adopted to simulate two-phase flow in the LLCR. The simulated and experimental concentration distributions agreed reasonably well. Mixing between the two phases benefited from back-mixing around the overflow outlet as well as steady flow downstream of the reaction chamber. The parameter IM (mixing intensity) was used to evaluate the mixing performance. The two phases were separated in a timely manner in the separation chamber.