An analysis of the Peach Bottom Unit 2 Turbine Trip 2 (TT2) experiment has been performed using the U.S. Nuclear Regulatory Commission coupled thermal-hydraulics and neutronics code TRAC-M/PARCS. The objective of the analysis was to assess the performance of TRAC-M/PARCS on a BWR transient with significance in two-phase flow and spatial variations of the neutron flux. TRAC-M/PARCS results are found to be in good agreement with measured plant data for both steady-state and transient phases of the benchmark. Additional analyses of four fictitious extreme scenarios are performed to provide a basis for code-to-code comparisons and comprehensive testing of the thermal-hydraulics/neutronics coupling. The obtained results of sensitivity studies on the effect of direct moderator heating on transient simulation indicate the importance of this modeling aspect.