Experiments encompassing both flow visualization and heat transfer measurements (125 < Rein < 1700 and 2.5 × 105 < Grq < 5 × 107) are performed to investigate buoyancy induced instability of developing laminar upflow and downflow of water in a vertical annulus having a diameter ratio of 2.0. The inner wall of the annulus is uniformly heated and the outer wall is insulated. Incipient flow instability is detected from the video images of the dyed flow field, the simultaneous decrease in the temperature difference between the heated wall and the water bulk from its laminar value and the fluctuations in the coolant temperature. The measured values of xfr, based on the video images of the dyed flow fields, are correlated for both buoyancy assisted and opposed flows as functions of local Grashof number, Grq, and local Reynolds number, Re. The Nusselt numbers for buoyancy induced turbulent flows. occurring downstream of the location of incipient instability, are as much as three times higher than those for stable laminar flows at the same inlet Reynolds number, but at lower Grq. The heat transfer data for buoyancy induced turbulent flows are correlated as: Nu = 0.088Raq0.33Rein−0.12, for upflow Nu = 0.21Raq0.29Rein−0.12, for downflow.