The magnetohydrodynamic (MHD) effect on the flow structures and heat transfer characteristics was studied numerically for a liquid metal-gas annular flow under a transverse magnetic field. The side layers, in which the velocity was increased, appeared near the eastern and western sidewalls in an annular MHD flow as in a single-phase liquid metal MHD flow. Temperature distribution in the liquid film, and the Nusselt number distribution in the angular direction were influenced by the flow structures with the side layers. Consequently heat transfer rate was higher at the eastern/western sidewalls than that at the southern/northern walls. The pressure drop in the MHD annular flow is of the same order of magnitude as in the single-phase MHD pipe flow under similar liquid metal flow condition. (c) 2005 Elsevier Ltd. All rights reserved.