Experiments of drag reduction in a horizontal, two-phase, annular flow are presented. The experiments were conducted in a high-pressure gas-condensate flow in 19 mm diameter pipe. The drag reducers were high molecular weight poly-alpha-olefin polymers. Motivated by the results of flow visualization, a model was developed which accounted for the drag reduction as a reduction of the height of the short-wavelength waves on the liquid film, and a reduction of the entrainment rate of droplets from the liquid film into the gas core. There was a reasonable quantitative agreement between the model predictions and the present experimental data. The model was also found to be equally effective when applied to drag reduction experiments in air-water annular flow from the literature. It properly account for the variation of drag reduction with superficial liquid velocity, superficial gas velocity, and pipe diameter. (C) 2004 Elsevier Ltd. All rights reserved.