This paper describes the phenomena of single phase natural circulation and boiling incipience in a closed loop with the heat flux, heater inlet temperature and the loopwise friction taken as parameters. Analytical results as well as experimental results were presented; both the results showed that the single phase natural circulation rate is proportional to the one-third power of the heat flux, and decreases with increase of the loopwise friction. Increases of the loopwise friction and the heater inlet temperature lead to early transition to the two-phase natural circulation. However, incipience of boiling occurred at much lower heat flux than predicted by the analysis with the assumption of thermal equilibrium. This is due to occurrence of the subcooled boiling, which also can be predicted with reasonable accuracy if the wall superheat (for onset of nucleate boiling) is taken into account. In addition, the flow behaviors such as variations of temperature and flow rate, and flow oscillations at the phase transition conditions were described qualitatively.