Discrete vortex simulations of a dilute two-dimensional particle-laden shear layer with one-way coupling were performed to study fluid-particle correlated motion and the transfer of turbulent kinetic energy between the phases. The resulting modification of carrier phase turbulence, estimated according to current computational models, was evaluated. Particle Stokes numbers were between 1.0 and 4.5, so that the particles showed considerable temporal concentration fluctuations due to centrifuging by the fluid flow structures, and the mass loading was 12% corresponding to a volume fraction of 6.0 x 10(-5). Fluid velocities and particle concentration and velocities and their covariances, which appear in a commonly used model equation for carrier phase turbulence modification, were evaluated. Additionally, the probability density functions of fluid velocity fluctuations viewed by the particles are presented and compared with their Eulerian counterparts. It was found that particles view reduced velocity fluctuations due to preferential clustering. The model for carrier-phase turbulence modification predicted turbulence reduction, depending on the particle Stokes number. The mechanism responsible for turbulence reduction was the correlated velocity fluctuations of fluid and particles and this reduction could reach values up to one third of the fluid flow dissipation. Preferential particle concentration together with a relative velocity between the phases could generate turbulent kinetic energy of the gas phase, however this production was nearly an order of magnitude smaller compared to reduction of turbulence due to the correlated motion. The findings were compared with experiments available in the literature and help to clarify the view when turbulence reduction or augmentation occurs. (C) 2010 Elsevier Ltd. All rights reserved.