This study examines the pressure drop and heat transfer characteristics of annular condensation in rectangular micro-channels with three-sided cooling walls. A theoretical control-volume-based model is proposed based on the assumptions of smooth interface between the annular liquid film and vapor core, and uniform film thickness around the channel's circumference. Mass and momentum conservation are applied to control volumes encompassing the liquid film and the vapor core separately. The model accounts for interfacial suppression of turbulent eddies due to surface tension with the aid of a new eddy diffusivity model specifically tailored to shear-driven turbulent films. The model predictions are compared with experimental pressure drop and heat transfer data for annular condensation of FC-72 along 1 x 1 mm(2) parallel channels. The condensation is achieved by rejecting heat to a counterflow of water. The data span FC-72 mass velocities of 248-367 kg/m(2) s, saturation temperatures of 57.8-62.3 degrees C, qualities of 0.23-1.0, and water mass flow rates of 3-6 g/s. The data are also compared to predictions of previous separated flow mini/micro-channel and macro-channel correlations. While some of the previous correlations do provide good predictions of the average heat transfer coefficient, they fail to capture axial variation of the local heat transfer coefficient along the channel. The new model accurately captures the pressure drop and heat transfer coefficient data in both magnitude and trend, evidenced by mean absolute error values of 3.6% and 9.3%, respectively. (C) 2011 Elsevier Ltd. All rights reserved.