Air loop reactors (ALR) have been widely used as promising and high-efficiency gas-liquid and gas-liquid-solid reactors. Extensive research on ALR has been conducted, but mostly limited to gas-liquid and gas-liquid-solid systems. Work associated with gas-solid systems has been rare and mainly focused on draft tube-lifted spouted bed treating coarse Geldart B, D particles. The present paper proposed a novel gas-solid air-loop reactor treating fine Geldart A particles and operating in a new annulus-lifted mode, with bubbling or turbulent bed upward flow in the annulus in parallel with bubbling bed downward flow in the draft tube. In view of these differences, distinct hydrodynamic behaviour can be anticipated for the gas-solid annulus-lifted air-loop reactor. The influence of operating conditions and geometric configuration on the distribution of bed density is discussed in a cold model annulus-lifted air loop reactor. A mechanistic model for the circulation mass flowrate is established based on an energy balance and resistance analysis. Nearly 50% and 30% of the energy dissipation rate occurs in the bottom and top regions, respectively. With increasing draft tube height, the energy dissipation rate increases in the annulus and draft tube regions, while it decreases in the top and bottom regions. The circulation mass flowrate decreases with increasing draft tube height. Analysis of the distribution of bed density and energy dissipation rate leads to suggestions regarding optimization of the design and axial location of the ring distributor and gap height. (C) 2010 Elsevier Ltd. All rights reserved.