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A characteristic analysis on the stability of the governing differential equations for an incompressible one-dimensional two-fluid model is presented. The stability criteria are newly proposed in terms of the momentum flux parameters by incorporating the effect of void fraction and velocity profiles. A simplified two-phase flow configuration constructed by using existing correlation for distribution parameter and experimentally correlated velocity profiles is selected to test the validity of the proposed theory. The curve of calculated momentum flux parameters is compared with the curve of stability criteria. The simplified flow is found to be stable within a wide range of void fraction.