A two-way relay channel in which two users communicate with each other over a relay terminal is considered. In particular, a ldquoseparatedrdquo two-way relay channel, in which the users do not receive each other's signals is studied. Various achievable schemes are proposed and corresponding achievable rate regions are characterized. Specifically, a combination of partial decode-and-forward and compress-and-forward schemes is proposed. In addition, compress-and-forward relaying with two layered quantization, in which one of the users receive a better description of the relay received signal is studied. Extension of these achievable schemes to the Gaussian separated two-way relay channel is presented. It is shown that the compress-and-forward scheme achieves rates within half bit of the capacity region in the Gaussian setting. Numerical results are also presented for comparison of the proposed achievable schemes in the Gaussian case.