A water driven ejector loop was designed and constructed for air absorption. The used ejector was horizontally installed in the loop and annular water jet at the throat entrained air through the circular pipe placed at the center of the ejector. Wide range of water flow rate was provided using two kinds of pumps in the loop. The tested range of water flow rate was 100${ell}$ /min to 1,000 ${ell}$/min. Two-phase flow inside the ejector loop was simulated by CFD analysis. Homogeneous particle model was used for void fraction prediction. Water and air flow rates and pressure drop through the ejector were automatically recorded by using the LabView based data acquisition system. Flow characteristics and air bubble velocity field downstream of the ejector were investigated by two-phase flow visualization and PIV measurement based on bubble shadow images. Overall performance of the two-phase ejector predicted by the CFD simulation agrees well with that of the experiment.