This paper investigates the effect of a grid spacer with mixing vane (MV) on flow characteristics of two-phase annular flows in a test channel, which was a circular pipe with 16mm I.D. To know the effects of spacers, a grid spacers with and without MV were installed in the test channel. Furthermore, two kinds of inclination angle of MV were tested to be 20° (MV-20) and 30° (MV-30). In the experiment, pressures upstream and downstream from the spacer were measured with a pressure transducer. Entrainment fraction and deposition rate were measured respectively with liquid film extraction method. Experimental data revealed that the deposition mass transfer coefficient was much higher for the spacer with mixing vanes than that without mixing vanes. No effects of the vane inclination angle on the mass transfer coefficient were seen. Therefore, the spacer with MV-20 was enough to re-deposit effectively liquid droplet to the channel wall downstream of the spacer, because pressure drop due to the spacer is smaller for MV-20 than MV-30.