Carbon dioxide (CO2 / R-744) is receiving renewed interest as a refrigerant, in many cases based on systems with microchannel heat exchangers that have high pressure capability, efficient heat transfer, and compact design. A good understanding of two-phase flow of evaporating CO2 in microchannels is needed to analyze and predict heat transfer. A special test rig was built in order to observe two-phase flow patterns, using a horizontal quartz glass tube with ID 0.98 mm, externally coated by a transparent resistive film. Heat flux was obtained by applying DC power to the film, and flow patterns were recorded at 4000 or 8000 frames per second by a digital video camera. Flow patterns were recorded for temperatures 20°C and 0°C, and for mass flux ranging from 100 to 580 kgm−2s−1. The observations showed a dominance of intermittent (slug) flow at low x, and wavy annular flow with entrainment of droplets at higher x. At high mass flux, the annular/entrained flow pattern could be described as dispersed. The aggravated dryout problem reported from heat transfer experiments at high mass flux could be explained by increased entrainment. Stratified flow was not observed in the tests with heat load. Bubble formation and growth could be observed in the liquid film, and the presence of bubbles gave differences in flow pattern compared to adiabatic flow. The flow pattern observations did not fit generalized maps or transition lines showed in the literature.