In this study, adiabatic vertical cocurrent downward air-water flow in an 8.8 mm internal diameter channel was investigated using non intrusive optical techniques. Flow pattern tests were performed to assess the influence of the inlet device, of the test section length and of the flow history on the flow pattern. These tests indicated that in each flow pattern region there are important differences in the actual flow structures and confirmed that a "smart" flow pattern map should then not only contain the flow pattern transition lines but give detailed characteristics of the actual flows expected (as previously suggested by Thome et al. (2012)). As a first such step in that direction here, an entrainment mechanism map superimposed on a two-phase flow pattern map has been proposed for the first time in this study, which should help to better predict the entrainment rate at a given air and water flow rate by knowing which type of entrainment will be predominant in a particular flow pattern. Furthermore, a new entrainment mechanism and a new two-phase flow structure, namely entrainment from the nose of an elongated bubble and membrane flow were observed in adiabatic vertical downward air-water flow and described. Some of the most important annular flow characteristic parameters, namely the liquid en- trainment rate, the liquid film velocity profile and the average film thickness were measured in this research. For the first time, the Planar Laser Induced Fluorescence (PLIF) technique was successfully adopted to measure the entrainment rate at low air and water superficial velocities and the results were compared with the Cioncolini and Thome (2012) entrainment prediction method. The liquid film velocity profiles obtained using the Particle Image Velocimetry (PIV) technique were non-dimesionalized and compared with the tubular universal velocity profile: good agreement was found only in the near wall region while towards the air-water interface, where the influence of the interfacial waves on the flow structure becomes more important, the universal velocity profile increasingly over predicts the measured velocity profiles. Furthermore, the PLIF technique provided time-resolved longitudinal images of the liquid film and allowed quantitative information to be obtained on the liquid film thickness and on the wave dynamics. Finally, high amplitude interfacial waves, which form at the inlet of the test section, were found to dictate the level of the entrainment, affect the liquid film velocity profile and the residual film thickness and to be responsible for the transition from annular to slug plus bubbly flow. The obtained results provide a strong basis for the future development of more sophisticated heat transfer prediction models for such geometries and flow regimes.