The purpose of this paper is to study the effect of the bulk modulus in the iterative matrix for the analysis of quasi-incompressible free surface fluid flows using a mixed Lagrangian finite element formulation and a partitioned solution scheme. A practical rule to set up the value of a pseudo-bulk modulus a priori in the tangent bulk stiffness matrix for improving the conditioning of the linear system of algebraic equations is also given. The efficiency of the proposed strategy is tested in several problems analyzing the advantage of the modified bulk tangent matrix with regard to the stability of the pressure field, the convergence rate and the computational speed of the analyses. The technique has been tested on the FIC/PFEM Lagrangian formulation presented in [19] but it can be easily extended to other quasi-incompressible stabilized finite element formulations. Copyright c 2010 John Wiley & Sons, Ltd.