A numerical scheme which is a combination of the dual reciprocity boundary element method (DRBEM) and the differential quadrature method (DQM), is proposed for the solution of unsteady magnetohydro-dynamic (MHD) flow problem in a rectangular duct with insulating walls. The coupled MHD equations in velocity and induced magnetic field are transformed first into the decoupled time-dependent convection-diffusion-type equations. These equations are solved by using DRBEM which treats the time and the space derivatives as nonhomogeneity and then by using DQM for the resulting system of initial value problems. The resulting linear system of equations is overdetermined due to the imposition of both boundary and initial conditions. Employing the least square method to this system the solution is obtained directly at any time level without the need of step-by-step computation with respect to time. Computations have been carried out for moderate values of Hartmann number (M <= 50) at transient and the steady-state levels. As M increases boundary layers are formed for both the velocity and the induced magnetic field and the velocity becomes uniform at the centre of the duct. Also, the higher the value of M is the smaller the value of time for reaching steady-state solution. Copyright (c) 2005 John Wiley & Sons, Ltd.