Incompressible moderate-Reynolds-number flow in a periodically grooved channel is investigated by direct numerical simulation using the finite-volume method on a staggered grid. A second-order, fully-implicit time-marching scheme is used together with a multigrid full approximation scheme (FAS) to accelerate the convergence process. Convergence factors of about 0.15 for each V(2, 2) cycle are observed. The computational results for steady flow show good agreement with that of Ghaddar et al. (1986). A local fine grid is placed about the cavity to achieve better accuracy, without the need for a global fine grid. Both FAC (see McCormick (1989)) and MLAT (see Brandt (1984)) adaptive techniques show optimal efficiency as solvers for the resulting composite grid problem.