One of the major problems associated with oil and gas production is the large volume of produced water. Operators around the world are facing significant costs with the treatment and disposal of produced water. Downhole separation, a relatively new technique, has been developed to reduce the costs of produced water and increase oil production. Downhole separation is the technique where oil and gas from the produced wa- ter is separated at the bottom of the well and re-inject some of the produced water into another formation, while the oil and gas are pumped to the surface. The reduction in cost is owed to the downhole treatment of the produced water since most of the topside produced water treatment facilities are reduced in number. Since most of the produced water does not reach the surface this creates an added value of minimizing the opportunity for contamination of underground sources of drinking water through leaks in casing and tubing during the injection process. The goal of this project was to design a downhole liquid-liquid separator and to evaluate the performance at downhole conditions with the aid of computational fluid dynamics. The separation performance is evaluated experimentally. A dedicated test rig has been designed and built at ProLabNL, a sister company of Ascom Separation, to test the separation efficiency of the downhole separator. The designed system consisted of three hydrocyclone stages in series to polish the water to the desired injectate quality of 100 ppm oil in water, and was operated under downhole conditions, i.e. high temperature (70 - 80 àC), high watercut (90 - 95%) and relatively large oil droplets (ranging from 500 - 1000 [?m]) dispersed in the continuous phase. The system design and the operational method are fully outlined. At the tail-end of production, reservoir pressure is depleted causing increased sand production. In the existing commercial downhole separators, the solids that are produced are re-injected downhole leading to potential plugging of the disposal zone. The proposed downhole fluid separation system is equipped with a de-sander to flush the separated sand with the oil rich stream to the surface. Computational fluid dynamics was used to evaluate the pressure balance and volume flux balance of the internals. An erosion analysis was conducted to investigate the wear due to the sand influx. Furthermore, laboratory tests were conducted to evaluate the influence of a progressive cavity pump (PCP) on the shearing effect of an oil water mixture. The pressure-drop over the pump seems to play a cru- cial role on the amount of droplet breakup which leads to a decrease in separation efficiency of the downhole separator.