Drops, one of the forms in which liquid is present in annular gas-liquid flow, are formed from the wall film, carried by the gas or vapour and redeposited. During this time they exert a strong influence on many important parameters of both flow and heat transfer. The available information on the creation, size and velocity, and removal of drops is identified and reviewed. This review shows that there is an extensive literature on drops and the associated topic of waves in annular gas-liquid flows. In spite of the large number of papers that have been published, there are still some fundamental questions which remain unanswered and there are large gaps in the parameter ranges to be considered. (C) 1998 Elsevier Science Ltd. All rights reserved.