Characteristics of liquid-liquid slug flow are investigated in a microchannel with focus on the leakage flow that bypasses droplets through channel gutters. The results show that the leakage flow rate varies in a range of 10.7-53.5% and 8.3-30.9% of the feed flow rate, during the droplet formation (i.e., at T-junction) and downstream flow (i.e., in the main channel), respectively, which highly depends on Ca number and wetting condition. Empirical correlations are proposed to predict them for perfectly and partially wetting conditions. Leakage flow contribution is further used to improve the Garstecki model for size scaling in order to extend its suitability for both squeezing and shearing regimes. The instantaneous flow rates of the immiscible phases are found to fluctuate periodically with the formation cycles, but in opposite behavior. The effect of the presence of leakage flow on such fluctuation are investigated and compared with gas-liquid systems. (c) 2017 American Institute of Chemical Engineers AIChE J, 63: 346-357, 2018