The mixed convection flow in a lid-driven square cavity filled with a porous medium under the effect of a magnetic field is studied numerically using the dual reciprocity boundary element method (DRBEM) with Houbolt time integration scheme. Induced magnetic field is also taken into consideration in terms of magnetic potential in solving magnetohydrodynamic (MHD) flow and temperature equations. Effects of the characteristic dimensionless parameters as Darcy (Da), Magnetic Reynolds (Rem), Grashof (Gr) and Hartmann (Ha) numbers, on the flow and heat transfer in the cavity are investigated at the final steady-state. It is found that the decrease in the permeability of porous medium and the increase in the intensity of the applied magnetic field cause the fluid to flow slowly. The convective heat transfer is reduced with an increase in Hartmann number. Magnetic potential circulates throughout the cavity with high magnetic permeability of the fluid. The combination of DRBEM with the Houbolt scheme has the advantage of using considerably small number of boundary elements and large time increments which results in small computational cost for solving the mixed convection MHD flow in a porous cavity. (C) 2013 Elsevier Ltd. All rights reserved.