Most microfluidic fuel cells use highly soluble fuels and oxidants in streams of liquid electrolytes to overcome the mass transport limitations that result from the low solubility of gaseous reactants such as hydrogen and oxygen. In this work, we address these limitations by implementing controlled two-phase flows of these gases in a set of microchannels electrolytically connected through a narrow gap. Annular flows of the gases reshape the concentration boundary layer over the surface of electrodes and increase the mass-transport limited current density in the system. Our results show that the power density of a two-phase system with hydrogen and oxygen streams is an order of magnitude higher than that of single phase system consisting of liquid electrolytes saturated with the same reactants. The reactor design described here can be employed to boost the performance of MFFCs and put them in a more competitive position compared to membrane based fuel cells. (C) 2017 The Authors. Published by Elsevier B.V.