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This letter describes a two-dimensional (2-D) extension of a recently developed finite-difference time-domain (FDTD) scheme to model wave propagation in bi-isotropic media. To our knowledge this method is the only one successfully generalized to modeling transient microwave signals in general lossy dispersive bi-isotropic media. The new 2-D cell built and computational procedure of the FDTD algorithm developed is described. Condon and Lorentz dispersion models have been included for modeling the frequency dependence of the medium parameters and the auxiliary differential equation (ADE) method is considered to deal with dispersion in order to avoid defining complex back-stored numbers to compute the convolutions recursively. Finally the oblique incidence of a wave on a chiral medium and the propagation in a general lossy bi-isotropic medium have been successfully simulated.