This paper reviews the studies on the pressure drop and the heat transfer in microchannels. Although a lot of studies about the single-phase flow have been done until now, conflicting results are occasionally reported about flow transition from laminar flow to turbulent flow, friction factor, and Nusselt number. Some studies reported the early flow transition due to relatively greater wall effect like surface roughness, but the other studies showed that the flow transition occurred at the Reynolds number of about 2300 and the early flow transition might be due to less accurate measurement of the channel geometry. Also, there have been arguments whether the conventional relation based upon continuum theory can be applied to the fluid flow and the heat transfer in microchannels without modification or not. The studies about the two-phase flow in microchannels have been mostly about investigating the flow pattern and the pressure drop in rectangular channels using two-component, two-phase flow like air/water mixture. Some studies proposed correlations to predict two-phase flow pressure drop in microchannels. They were mostly based on Lockhart-Martinelli model with modification on C-coefficient, which was dependent on channel geometry, Reynolds number, surface tension, and so on. Others investigated the characteristics of flow boiling heat transfer in microchannels with respect to test parameters such as mass flux, heat flux, system pressure, and so on. The existing studies have not been fully satisfactory in providing consistent results about the pressure drop and the heat transfer in microchannels. Therefore, more in-depth studies should be done for understanding the fundamentals of the transport phenomena in the microchannels and giving the basic guidelines to design the micro devices.