Measurement of liquid velocities in downcomer and riser of the annulus sparged internal loop airlift contactor (ALC) revealed that there was an unbalance fluid flow in the system. This was due to the existence of the internal liquid circulation in the riser of the ALC. A mathematical model based on material and energy conservation principals was then introduced to determine the extent of this internal liquid circulation. It was shown that the internal liquid circulation was affected predominantly by the superficial gas velocity (u(sg)) and the ratio between downcomer to riser cross-sectional areas (A(d)/A(r)) of the ALC. An increase in U-sg gave rise to the down-flow liquid flowrate in the riser. but on the other hand, reduced the fraction of down-flow area in riser. A(d)/A(r) was found not to significantly influence the fraction of down-flow and up-flow areas but small A(d)/A(r) tended to increase the down-flow velocity in the riser. (C) 2003 Elsevier B.V. All tights reserved.