The Daegu subway station fire on February 18th, 2003, was a disastrous incident that killed the lives of 192 people in Korea. In the present study, a detailed simulation was carried out to investigate the flows of fire and smoke in the underground subway station with consideration to factors including fire development, air flow induced by the moving train, and buoyancy of the fire. From the simulation results, higher concentrations of smoke were found to be near the staircase areas where many of the casualties were reported in the real disaster. The effect from ventilation operation in the station on the movement of smoke is studied to explore ways to reduce otherwise higher smoke concentrations in critical locations, such as staircases. The results of the present study provide suggestions on proper design of subway ventilation systems in case of a fire, in order to control smoke dispersion and ultimately assist in the safe evacuation of passengers.