This paper examines the effect of small downward inclinations on the formation of slugs. Experiments were conducted with air and water at atmospheric pressure, in a pipe with a diameter of 0.0763 m, a length of 23 m and inclinations of -0.2, -0.5 and -0.8 degrees. Measurements of the variation of the interfacial displacement were made simultaneously at a number of locations. For low gas velocities in a horizontal configuration waves with lengths of 16-20 cm, grow until they reach of the top of the pipe. These waves evolve from smaller wavelength waves (8-10 cm) through a non-linear growth mechanism. At high gas velocities, the liquid height is not large enough for this mechanism to be operable. In these cases slugs evolve from the coalescence of roll waves. Surprisingly, the large amplitude small wavelength waves observed in horizontal flows, at the transition to slug flow, are damped in pipelines that are inclined slightly downward. The transition is associated with the initiation of long wavelength, small amplitude waves, whose appearance is predicted by a viscous long wavelength linear stability analysis. A local Kelvin-Helmholtz instability at the crest of a growing long wavelength wave is observed when a slug forms. The frequency of slugging is equal to frequency of these long wavelength waves. (C) 2000 Elsevier Science Ltd. All rights reserved.