Based on a physical model of the test loop HRTL-5 simulating the 5 MW nuclear heating reactor, a drift-flux model of two-phase flow has been derived, in which the sub-cooled boiling and saturated boiling in the heated section, condensation and void flashing in the adiabatic riser etc, are taken into account. It is suitable to investigate the natural circulation two-phase flow, especially at heating reactor conditions. By introducing the concept of condensation boundary layer, a condensation formula has been derived and complemented into the drift-flux model, which was used to investigate the behavior of the HRTL-5 in our previous research works. Based on the mathematical model, a computer program has been developed. At first, through comparing the calculations with the experimental results, the parameters in the two-phase drift-flux model have been determined. Then calculations on the flow characteristics of HRTL-5 have been performed, including the simulation of the mass flow rate and the distribution of various physical variables. At last, the characteristic curves of natural circulation have been simulated; thereby, also useful experiences have been acquired.