Local condensation heat transfer rates are measured for steam-air mixtures in direct contact with subcooled water layers inside a vertical tube over a wide range of liquid flow rates. The gas mixture is maintained effectively stagnant during the tests and the major resistance to heat transfer is due to the large amount of noncondensables. A theoretical model is developed to account for some additional thermal resistance on the liquid side, by decomposing the liquid film into a wavy ’nonresistant’ region and a substrate region where temperature gradients may prevail. Heat transfer coefficients are found to depend not only on the steam concentration but also on the liquid flow rate. Interestingly, wave characteristics of the falling liquid layer, such as the dominant wave velocity and frequency, demonstrate that condensation may only be responsible for minor modifications of the isothermal liquid surface morphology. Furthermore, the dependence of heat transfer coefficients on the liquid flow rate is attributed to the dynamic interaction between the interfacial waves and the gas layer. This notion is utilized by correlating measured gas Sherwood numbers with the gas Grashof number and a dimensionless parameter which characterizes the interface.