This study aims to investigate the hole cleaning process during the flow of a drilling fluid consist of a gas and a liquid phase through a horizontal annulus. Experiments have been conducted using METU Multiphase Flow Loop under a wide range of air and water flow rates while introducing cuttings into the annulus with several different amounts. Data has been collected for steady state conditions, i.e., liquid, gas and cuttings injection rates are stabilized. Collected data include flow rates of liquid and gas phases, frictional pressure drop inside the test section, local pressures at different locations in the flow loop, and high-speed digital images for identification of solid, liquid and gas distribution inside the wellbore. Digital image processing techniques are applied on the recorded images not only for volumetric phase distribution inside the test section, but also examination of the transport velocities of cuttings particles, which are in dynamic condition. The effects of liquid and gas phases are investigated on cuttings transport behavior under different flow conditions. Observations showed that the major contribution for carrying the cuttings along the wellbore is the liquid phase. However, as the gas flow rate is increased, the flow area left for the liquid phase drastically decreases, which leads to an increase in the local velocity of liquid phase causing the cuttings to be dragged and moved, or a significant erosion on the cuttings bed. Therefore, increase in the flow rate of gas phase causes an improvement in the cuttings transport although the liquid phase flow rate is kept constant. Based on the observations, a mechanistic model which estimates the total cuttings concentration inside the wellbore and developed frictional pressure loss is introduced for gasified fluids flowing through horizontal annulus. The model estimations are in good agreement with the measurements obtained from the experiments. Using the model, minimum liquid and gas flow rates are identified for having an acceptable cuttings concentration inside the wellbore as well as a preferably low frictional pressure drop. Thus, the information obtained from this study is applicable to any underbalanced drilling operation conducted with gas-liquid mixtures, for optimization of flow rates for liquid and gas phases in order to transport the cuttings in the horizontal sections in an effective way with a reasonably low frictional pressure loss.