Heat transfer characteristics of an annular heat pipe is investigated theoretically and experimentally. An annular heat pipe transports maximum heat which is found to be a cubic polynomial function of the thickness of annulus when the annulus becomes large, maximum heat transfer rate Is limited by boiling criterion. The limit decreases inversely proportional to the thickuess of annulus. Theoretical formula for thermal resistance of annular heat pipe Is proposed. Experimental results on the maximum heat transfer rate satisfactorily agree with theory. Measured thermal resistance is found to be lower than the predicted results as the thickness of annulus becomes large.