A new numerical algorithm using equal order linear finite element and fractional step method has been developed which is capable of analyzing unsteady fluid flow and heat transfer problems. Streamline Upwind Petrov-Galerkin (SUPG) method is used for the weighted residual formulation of the Navier-Stokes equations. It is shown that fractional step method, in which pressure term is splitted from the momentum equation, reduces computer memory and computing time. In addition, since pressure equation is derived without any approximation procedure unlike in the previously developed SIMPLE algorithm based FEM codes, the present numerical algorithm gives more accurate results than them. The present algorithm has been applied preferentially to the well known bench mark problems associated with steady flow and heat transfer, and proves to be more efficient and accurate.