A three-dimensional (3D), multiphase lattice Boltzmann approach is used to study a pressure-driven displacement flow of two immiscible liquids of different densities and viscosities in a square duct. A three-dimensional, 15-velocity (D3Q15) lattice model is used. The effects of channel inclination, viscosity, and density contrasts are investigated. The contours of the density and the average viscosity profiles in different planes are plotted and compared with those obtained in a two-dimensional (2D) channel. We demonstrate that the flow dynamics in a 3D channel is quite different as compared to that of a 2D channel. We found that the flow is relatively more coherent in a 3D channel than that in a 2D channel. A new screw-type instability is seen in the 3D channel that cannot be observed in the 2D channel.