A three-dimensional thermal-hydraulic code, CUPID, has been developed for the analysis of transient two-phase flows at component scale. The CUPID code adopts a two-fluid three-field model for two-phase flows. A semi-implicit two-step numerical method was developed to obtain numerical solutions on unstructured grids. This paper presents an overview of the CUPID code development and assessment strategy. The governing equations, physical models, numerical methods and their improvements, and the systematic verification and validation processes are discussed. The code couplings with a system code, MARS, and, a three-dimensional reactor kinetics code, MASTER, are also presented.