We have built a microfluidic logic family and architecture based on two-phase flow. In this scheme, presence or absence of a bubble or a droplet in a fluidic network represents a bit. Logic operations are executed based on direct or indirect bubble interactions. The system is sufficiently nonlinear to exhibit universal logic. The nonlinearity is derived from boundary conditions of two-phase flow. With the emergence of very large-scale integrated microfluidic systems, there is an immediate need to build local flow control systems. Bubble Logic can be used for various applications including bubble display, combinatorial synthesis, and control architecture for lab-on-chip devices.