An oil-lubricated wet clutch has a direct impact on the drivability and fuel economy of a vehicle equipped with an automatic transmission system. However, a reliable analysis of clutch behavior still remains a challenge. The purpose of this study is to advance the state-of the-art in CFD methodology for modeling transient clutch behavior. First, a new iterative scheme is developed, in combination with commercial CFD software, which is capable of simulating the squeeze film process in a wet clutch. The numerical results are then validated using analytical solutions of the Reynolds equation for simplified clutch geometry and various boundary conditions. It is found that the choice of boundary conditions has a strong influence on squeeze film simulation. The iterative scheme is further validated by comparison to clutch engagement experiments. The performance of the proposed model is encouraging, so this work may potentially lead to the development of the baseline architecture for a comprehensive multi-physics clutch model.