A novel microfluidic surface-based competition immunoassay, termed the concentration gradient immunoassay (described in detail in a companion paper (Nelson, K.; Foley, J.; Yager, P. Anal. Chem. 2007, 79, 3542-3548.) uses surface plasmon resonance (SPR) imaging to rapidly measure the concentration of small molecules. To conduct this assay, antibody and analyte are introduced into the two inlets of a T-sensor (Weigl, B. H.; Yager, P. Science 1999, 283, 346-347. Kamholz, A. E.; Weigl, B. H.; Finlayson, B. A.; Yager, P. Anal. Chem. 1999, 71, 5340-5347). Several millimeters downstream, antibody molecules with open binding sites can bind to a surface functionalized with immobilized antigen. This space- and time-dependent binding can be sensitively observed using SPR imaging. In this paper, we describe a complex three-dimensional finite element model developed to better understand the dynamic processes occurring with this assay. The model shows strong qualitative agreement with experimental results for small-molecule detection. The model confirms the experimental finding that the position within the microchannel at which the antibody binds to the immobilized analyte may be used to quantify the concentration of analyte in the sample. In addition, the model was used to explore the sensitivity of assay performance to parameters such as antibody and analyte concentrations, thereby giving insight into ways to optimize analysis speed and accuracy. Given the experimental verification of the computational results, this model serves as an efficient method to explore the influence of the flow rate, microchannel dimensions, and antibody concentration on the sensitivity of the assay.