In this paper a smoothed particle hydrodynamics (SPH) method is introduced for simulating two-dimensional incompressible non-Newtonian fluid flows, and the non-Newtonian effects in the flow of a fluid which can be modelled by generalized Newtonian constitutive equations are investigated. Two viscoplastic models including Bingham-plastic and power-law models are considered along with the Newtonian model. The governing equations include the conservation of mass and momentum equations in a pseudo-compressible form. The spatial discretization of these equations is achieved by using the SPH method. The temporal discretization algorithm is a fully explicit two-step predictor–corrector scheme. In the prediction step, an intermediate velocity field is obtained using a forward scheme in time without enforcing incompressibility. The correction step consists of solving a pressure Poisson equation to satisfy incompressibility by providing a trade-off between the pressure and density variables. The performance of the proposed scheme is evaluated by studying a benchmark problem including flow of viscoplastic fluids in a lid-driven cavity. Both Newtonian and non-Newtonian cases are investigated and the results are compared with available numerical data. It was shown that in all cases the method is stable and the results are in very good agreement with available data.