Blood flow distribution in microvessels contains the interactions between blood cells and exhibits complex dynamic. Because of small scale of microvessels, experimental research has encountered some limitation. With the advancement of computational methods, numerical simulation has been able to provide valuable information in microvessels. The aim of this study is to simulate the behaviors, movements and deformations of red and white blood cells in microvessels using lattice Boltzmann and immersed boundary methods. Two different shell-based models are used to express the mechanical properties of blood cells and the aggregation among red cells is modeled by the Morse potential. At first, single red cell movement has been investigated and it was observed that a cell deforms into a parachute shape as it travels in centerline of microchannel and gradually move toward the centerline, when it is initially located at a position offset to centerline. Its deformation and movement depend on membrane rigidity. In the following, movements and deformation of concentrated red cell suspensions has been studies and the flow development process demonstrates how red blood cells migrate away from the boundary toward the channel center and left plasma fluid near the wall. The effects of cell deformability and aggregation strength on cell free layer thickness have been investigated and it was found that the cell free layer thickness increases with both cell deformability and aggregation strength. Several important characteristics of microscopic blood flows observed experimentally have been well reproduced in our model, including the cell free layer, blunt velocity profile, changes in apparent viscosity, and the Fahraeus effect. Finally, white cell is added and it was observed that the cell migrates toward the vessel walls (margination). Effect of deformability of both red and white cells and red blood cell aggregation on margination is studied. Results show that red cells aggregation enhances white cell margination, while white cell deformability and reduced red cell flexibility decrease it. The results can be used to understand the complex process of cells movements and deformations and their effects on microcirculation and biomedical processes. Keywords: Lattice Boltzmann Method, Immersed Boundary Method, Microvessel, Cell Free Layer, Morse Potential, Shell-Based Membrane Models, Blunt Profile Velocity, Fahraeus effect, Margination