Hydrogen release in confined spaces is an important safety issue, which is even more important in the context of severe accident in nuclear reactors. In severe accidents, hydrogen release is associated with release of steam and the condensation of steam on walls leads to increase in concentration of hydrogen in residual gas as well as condensation induced mixing. In the present paper, a model for falling film steam condensation in the presence of noncondensable gases is presented. The steam condensation model is incorporated into an in-house developed CFD code called hydrogen distribution simulator (HDS) and is used for hydrogen distribution studies. The validation of the CFD model with steam condensation against the experimental results from the CONAN facility is discussed. Subsequently, the model is applied to a typical release situation involving release of hydrogen and steam for some time and its distribution for a long time beyond it. The heat and mass transfer aspects of the problem are highlighted. It is seen that steam condensation has an important bearing on the distribution of hydrogen and the mixing behavior of gases in the enclosure.