The stability of the two-phase flow in a heated channel is of great importance in the design and operation of the boilers and light water nuclear reactors, because it can cause flow oscillations and lead to a violation of thermal limits with resultant overheating of the channels and cladding. This paper presents a systematic evaluation to the variation effects of the basic four (4) dimensionless parameters in a homogeneous equilibrium model. The flow stability is examined on the ground of static characteristic curves. The complicated transfer function of flow dynamics which gives consideration to the transport lag of density wave is derived, and the transient flow stability is analysed by applying the Nyquist stability criterion in control engineering. The analysis results summed up as follows 1. The coolant flow becomes stable in large friction number and specific flow, while it is unstabale in small friction number and flow. 2. Large phase-change number and Froude number destabilize the two-phase flow, but small numbers stabilize it. The effect to variation of phase-change number is more dominant compared with Froude number. 3. The dynamic analysis is required to hold the sufficient safety of heated channels since only static results does not keep it. The special attention could be payed in the design and operation of heat engines, because the unstaable region exists within the stable boundary at small and middle phase-change number and Froude number.