This study describes the numerical simulation of two-dimensional droplet formation and the following motion by using the Lattice Boltzmann Method (LBM) with the phase field equation. The free energy model is used to treat the interfacial force and the deformation of a binary fluid system, drawn into a cross-junction microchannel. While one, fluid is introduced through the central inlet channel, the other fluid is drawn into the main channel through the two vertical inlet channels. Due to the effect of surface tension on the interface between the two fluids, the droplets of the first fluid are formed near the cross-junction. The aim in this investigation is to examine the applicability of LBM to the numerical analysis of the droplet formation and its motion in the microchannel. It was found from comparison with the experimentally visualized patterns that LBM with the free energy model can reproduce the droplet formation successfully. However because of the stability problem which is intrinsic for high surface-tension cases, it requires a very long computational time. This issue is to be resolved in the future.