In this paper, a fully coupled finite volume-finite element model for a deforming porous medium interacting with the flow of two immiscible pore fluids is presented. The basic equations describing the system are derived based on the averaging theory. Applying the standard Galerkin finite element method to solve this system of partial differential equations does not conserve mass locally. A non-conservative method may cause some accuracy and stability problems. The control volume based finite element technique that satisfies local mass conservation of the flow equations can be an appropriate alternative. Full coupling of control volume based finite element and the standard finite element techniques to solve the multiphase flow and geomechanical equilibrium equations is the main goal of this paper. The accuracy and efficiency of the method are verified by studying several examples for which analytical or numerical solutions are available. The effect of mesh orientation is investigated by simulating a benchmark water-flooding problem. A representative example is also presented to demonstrate the capability of the model to simulate the behavior in heterogeneous porous media