For self-entrainment venturi nozzles, the effects of nozzle shapes and operating conditions on the water−air two-phase flow pattern, and the characteristics of the air entrainment rate have been investigated. A rectangular venturi nozzle with width and height dimensions of 3 mm and 0.5 mm was used with a vertically downward flow direction. The pressure ratio, which is the ratio of the inlet and outlet pressures, water flow rate, and diverging angle were set as experimental parameters. From the flow visualization, annular and bubbly flows were observed. In the case of bubbly flow, the more bubbles that are generated with a higher water flow rate, the smaller the pressure ratio. In the case of annular flow, the increased pressure ratio and water flow rate induce the breakup of air core in the diverging area and make the interfacial oscillation stronger, which finally causes the flow transition from annular to bubbly flow, by accompanying a sharp increase in the air entrainment rate. During this flow transition, the frictional pressure drop of the two-phase flow is reduced, showing that a two-phase multiplier gets smaller.