Abstract The generation of slugs was studied for air–water flow in horizontal 0.0763 m and 0.095 m pipes. The emphasis was on high liquid rates (uLS ⩾ 0.5 m/s) for which slugs are formed close to the entry and the time intervals between slugs are stochastic. A “fully developed” slug flow is defined as consisting of slugs with different sizes interspersed in a stratified flow with a height slightly larger than the height, h0, needed for a slug to be stable. Properties of this “fully developed” pattern are discussed. A correlation for the frequency of slugging is suggested, which describes our data as well as the data from other laboratories for a wide range of conditions. The possibility is explored that there is a further increase of slug length beyond the “fully developed” condition because slugs slowly overtake one another. The evolution of slugs from a highly disturbed stratified flow at the inlet was studied by measuring the holdup at a number of locations along a 20 m length of 0.0763 m pipe. At superficial gas velocities less than 3 m/s incipient slugs form by waves touching the top of the pipe very close to the entry. At USG > 3–4 m/s incipient slugs form by wave coalescence farther downstream. These incipient slugs grow as long as the height of the stratified flow in front of them is greater than h0. When equal to h0, the slug can propagate downstream or decay if it has not reached a stable length. Decaying slugs form large amplitude roll waves which propagate downstream at a lower velocity than slugs. Slugs that overtake these waves increase in size. These results can be used in developing a stochastic model for the evolution.