This paper presents the results of a two phase Euler-Euler simulation of seepage flow through granular media for upward flow conditions in soils. The simulation first deals with the fluidization process in a stable granular soil. The first fluidization in the sand column is studied and the stable fluidization condition is reached by the development of particle repulsion and the effect of inertia on the resistance of the granular bed. Considering Richardson’s expansion law, porosity changes with the flow rate variation are described based on the rarefaction waves. In this study the variation of water and soil phases before and after the critical hydraulic gradient are evaluated. The results of the simulation reveal that the variation of soil pressure before and after the critical hydraulic gradient are inverse and the Terzaghi’s effective stress theory is valid only to the onset of the first fluidization. In the second part of the paper, the fluidization and internal erosion processes in the artesian conditions in internally unstable soils are discussed. In internally unstable soils the finer soil particles are able to move through the constrictions of the coarse particles. This may lead to internal erosion and as a result the critical hydraulic gradient drastically increases. The erosion phenomenon is described using the theory of continuum mechanics for the soil consisting of stationary grains, movable grains and the fluid. The continuity and momentum equations are derived for the soil and based on this theory a numerical two phase model for the erosion and fluidization of particles are presented. The results reveal that by the commencement of erosion, the porosity of the soil decreases and the flux of eroded particles increases with time.