The energy dissipation is generally regarded as only contributed by the frictional pressure drop in gas-liquid two-phase flow. Based on energy dissipation analysis, a new term of energy dissipation is found in inclined gas-liquid two-phase flow. This new term is contributed by the combined effect of gravity, liquid holdup and pipe inclination. The change of liquid holdup is an indication of mechanical energy dissipation for inclined or vertical gas-liquid flows. As a result, a new method is proposed for the evaluation of drag reduction in gas-liquid two-phase flow. An experimental setup with a pipeline was established to examine the different drag reductions in gas-liquid flows by adding small amount of drag reducing agent (DRA). This pipeline has five different test segments with different inclinations. One of them was designed for horizontal single-phase liquid flow. Four of them were designed for horizontal, inclined upward, inclined downward and vertical gas-liquid two-phase flows. The inside diameter of the pipeline is 0.04 m. The DRA used here is a water-soluble polymer. The experiments were conducted slightly above atmospheric pressure, using air and the water-based solution of the polymeric DRA. For horizontal gas-liquid flow, the drag reductions evaluated by this new method are identical with the results evaluated by a method usually used in multiphase flow. But for vertical and inclined gas-liquid flows, the deviations between these two methods are obvious. The maximum relative deviation is as high as 3.9 which occurs in inclined downward flow. It is found that the polymeric DRA has the maximum effect in horizontal gas-liquid flow rather than in inclined and vertical cases from the point of view of energy dissipation. The findings here provide new insights into the drag reduction occurring in gas-liquid two-phase flow, especially in inhomogeneous inclined and vertical cases. (c) 2013 Elsevier Ltd. All rights reserved.