Phase inversion and its associated phenomena are experimentally investigated in co-current upward and downward oil-water flow in a vertical stainless steel test section (38 mm I.D.). Oil (rho(o)= 828 kg/m(3), mu(o)= 5.5 mPa s) and tap water are used as test fluids. Two inversion routes (w/o to o/w and o/w to w/o) are followed in experiments where either the mixture velocity is kept constant and the dispersed phase fraction is increased (type I experiments), or the continuous phase flow rate is kept constant and that of the dispersed phase is increased (type II experiments). By monitoring phase continuity at the pipe centre and at the wall it was found that phase inversion does not happen simultaneously at all locations in the pipe cross-section. In type I experiments, the velocity ratios (U-o/U-w) where complete inversion appeared acquired the same constant value in both flow directions, although the phase inversion points, based on input phase fractions, were different. In contrast to previous results in horizontal flows, frictional pressure gradient was found to be minimum at the phase inversion point. The interfacial energies of the two dispersions before and after phase inversion, calculated from the measured drop sizes, were found to be different in contrast to the previously suggested criterion of equal energies for the appearance of the phenomenon. In type II experiments the phase inversion point was found to depend on mixture velocity for low and medium velocities but not for high ones. In all cases studied an ambivalent region, commonly reported for inversion in stirred vessels, was not observed.