In the two-fluid model, interfacial concentration is one of the important parameters. The objective of this study is to develop an interfacial area equation with the source and sink terms being properly modeled. For bubble coalescence, the random collisions between bubbles due to turbulence, and the wake entrainment process due to the relative motions of the bubbles, were included. For bubble breakup, the impact of turbulent eddies is considered. Compared with measured axial distributions of the interfacial area concentration under various dow conditions, the adjustable parameters in the source/sink terms were obtained for the simplified one-dimensional transport equation.