Abstract: A coupled Level-Set method for the analysis of free surface seepage is established, which is meant to analyze the cause of bubbling phenomenon after the water level rose rapidly in Huangbizhuang Reservoir, and to ensure the reservoir is in safe operation. The gas phase compressibility during the infiltration process is considered, thus the movement and fusion of the water-gas two-phase interface in porous medium can be reflected intuitively during the infiltration process. This method can solve the seepage problem involving gas phase which cannot be solved by conventional methods. The two-phase movement processes in front of dam of Huangbizhuang Reservoir in different water storage processes were simulated with this method. The results showed that:the bubbling phenomenon of water surface in front of dam was caused by the sudden rise of the water level, which surrounded air in the blanket and compressed air with the water infiltration process, until the air pressure reached the break pressure, then air released; the key factor affecting the occurrence and development of the bubbling phenomenon is the water storage process. The simulation results are basically consistent with the actual observation results, which verifies the rationality of the method.