Recently, there is a strong interest in the modelling of reservoir fluid flow with geomechanical deformation. With the help of geomechanics, many physical phenomena can be explained, e.g. reservoir compaction and subsidence, casing failure or pore collapse. Several methods for coupling geomechanics to fluid flow in the reservoir have been proposed: fully coupled, iterative coupled and explicit coupled methods. The iterative coupled method has proven to be the most effective approach. However, no paper has discussed this method in detail from a reservoir engineering perspective. In this paper, the iterative coupling method is described step by step from the basic equations for geomechanics and reservoir flow to the coupling technique through porosity and permeability. This description is aimed at reservoir engineers with little background in geomechanics. A number of examples using different nonlinear constitutive models such as elasto-plasticity model, elastoplastic cap model and dilation-recompaction model are used to illustrate the importance of including geomechanics in reservoir simulation.