A finite volume method-based CFD model has been developed to simulate steady, turbulent, two-dimensional annular gas-liquid flow in a duct. The gas flow is treated as being equivalent to flow through a rough-walled duct. The effect of the liquid film on the gas phase is included in the form of modified wall functions which incorporate the well-known triangular relationship (Annular Two-Phase Flow, Pergamon Press, Oxford, 1970) that exists among wall shear stress, film flow rate and film thickness in annular flow. The presence of droplets is accounted for by solving an additional scalar transport equation for the mass fraction of the droplets. Entrainment and deposition of droplets are included as source term and boundary condition, respectively, in the mass fraction equation. It is shown that the resulting model, while retaining simplicity of formulation, gives good predictions of the literature dat a of annular flow parameters under equilibrium and non-equilibrium conditions. (C) 2004 Elsevier Ltd. All rights reserved.