To ensure that raw milk quality is maintained during storage, milk needs to be chilled and kept at a certain temperature. To prevent the milk from creaming and to provide uniform temperature distribution, the milk needs to be smoothly stirred. Thus the milk storage process combines heat transfer and fluid flow. This work is part of a project studying the optimisation of the design and operation of farm milk vats used for storing milk awaiting collection on New Zealand dairy farms. It concentrates on CFD simulations of the fluid flow and heat transfer in an unbaffled agitated model milk vats, In previous experimental work, fresh tap water was used instead of milk, as a medium to minimise costs and heat transfer coefficients were measured for the heating process, instead of cooling. The CFD simulations in this work were also performed for heating instead of cooling of the fluid in the vat to permit comparison with available experimental results. The geometry simulated was that of the experimental milk vat in the laboratory, being a one-third linear scale model of a commercial vat. Computational Fluid Dynamics (CFD) package, CFX4.1, was used to solve the three-dimensional fluid flow and heat transfer in the milk vat. The impeller boundaries were directly simulated using the rotating reference frame. The solution accuracy has been numerically examined using a set of different sized grids and two turbulence models, the k-ε model and the DS model. It was found that the DS model gave better prediction than the k-ε model, but required excessive computing time. Balancing the simulation results and the available computing facility, the k-ε model in conjunction with the rotating reference frame fixed on the impeller has been employed in this work. The simulated impeller rotational speed ranged from 18 rpm up to 117 rpm, with the corresponding Reynolds number of about 20,000 to 144,000 resulting fully turbulent flow. The simulations of fluid flow for the batch operation mode show that the higher the impeller speed, the stronger the circulation flow is, and therefore the larger the impeller pumping capacity. However, both the pumping number and the circulation number are almost independent of the impeller speed. To provide a steady state heat transfer process, a cooling liquid stream was introduced to the milk vat directly. This was defined as the continuous operation mode. The incoming liquid affects the discharge flow produced by the impeller, and therefore the circulation flow, but this effect is not significant at the high Reynolds numbers. The predicted heat transfer coefficients were compared with the available experimental data. The comparison shows that the k-ε model in conjunction with heat transfer can give a reasonable prediction of the heat transfer coefficients in the range of Reynolds number simulated.