Flow characteristics in a closed natural convection toroidal loop in which both single-phase and two-phase zones coexist are examined by using the one-dimensional homogeneous equilibrium model in two-phase zone and Boussinesq approximation in single-phase zone. The two-phase natural circulation is induced by the density difference between the vapor and the liquid phase. Effects of loop inclination, total mass of fluid in the loop, internal energy and heat on the flow are investigated. It is found that two steady state solutions are possible, but only one solution is stable. Linear stability analysis shows that the increase of the loop inclination results in a larger stable region. The size of disturbance is large enough so that the steady convection is found to lose its stability even in the linearly stable region. In the unsteady probelm, the flow shows steady, periodic behaviors and gas region at particular condition. Finally, the results obtained in this study are compared with those of single-phase loop.