Domain decomposition methods are widely used as preconditioners for Krylov subspace linear solvers. In the simulation of porous media flow there has recently been a growing interest in nonlinear preconditioning methods for Newton’s method. In this work, we perform a numerical study of a spatial additive Schwarz preconditioned exact Newton (ASPEN) method as a nonlinear preconditioner for Newton’s method applied to both fully implicit or sequential implicit schemes for simulating immiscible and compositional multiphase flow. We first review the ASPEN method and discuss how the resulting linearized global equations can be recast so that one can use standard preconditioners developed for the underlying model equations. We observe that the local fully implicit or sequential implicit updates efficiently handle the local nonlinearities, whereas long-range interactions are resolved by the global ASPEN update. The combination of the two updates leads to a very competitive algorithm. We illustrate the behavior of the algorithm for conceptual one and two-dimensional cases, as well as realistic three dimensional models. A complexity analysis demonstrates that Newton’s method with a fully implicit scheme preconditioned by ASPEN is a very robust and scalable alternative to the well-established Newton’s method for fully implicit schemes.