Two-phase flow without phase change can radically increase the heat transfer rate in microchannels due to the internal recirculation of the fluids. In this paper, both numerical and experimental studies on the hydrodynamics and heat transfer of two-phase flow without phase change in small channels and tubes are reviewed. These two-phase flows are either made up of gas-liquid or immiscible liquid-liquid slug flows. This review includes a general introduction of the hydrodynamics of two-phase flow in microchannels and shows that there is little agreement between measured and predicted pressure drop. Furthermore heat transfer rates are examined in the form of Nusselt number (Nu) correlations based on different flow parameters. Values are compared using a standard flow regimes for two-phase slug flow indicating huge variability (over 500%) in the Nu values obtained from reported correlations. We attribute this to insufficient description and consideration of the flow conditions. Finally a perspective on future research directions in the field is suggested, including control through wettability and the use of novel liquids.