Evanston, IL 60201 such as have occurred in the LNG, aluminum, steel and paper industries, is thought to be nonlinear Taylor instability. An analysis, based on a generalized coordinate method developed by Dienes for a fluid with an arbitrary constitutive law, is here extended to a two-fluid model, with or without mass transfer between the fluids. Numerical results indicate that in a steam-water system entrainment starts in times of order 10-4s at 100 G acceleration normal to the interface. For gas-liquid systems the presence of the second fluid changes the instability growth only slightly. Condensation of steam, even when limited only by the kinetic theory interfacial resistance, also has minor effects on the growth rate. However, condensation on the entrained drops will have a major effect on the acceleration, January, 1983