This study explores hydrodynamic instability and pressure drop in a water-cooled two-phase micro-channel heat sink containing 21 parallel 231 x 713 mum micro-channels. Two types of two-phase hydrodynamic instability were identified: severe pressure drop oscillation and mild parallel channel instability. It is shown the severe pressure drop oscillation, which can trigger pre-mature critical heat flux, can be eliminated simply by throttling the flow upstream of the heat sink. Different methods for predicting two-phase pressure drop are assessed for suitability to micro-channel heat-sink design. First, generalized two-phase pressure drop correlations are examined, which include 10 correlations developed for both macro- and mini/micro-channels. A new correlation incorporating the effects of both channel size and coolant mass velocity is proposed which shows better accuracy than prior correlations. The second method consists of a theoretical annular two-phase flow model which, aside from excellent predictive capability, possesses the unique attributes of providing a detailed description of the various transport processes occurring in the micro-channel, as well as fundamental appeal and broader application range than correlations. (C) 2003 Elsevier Science Ltd. All rights reserved.