The study of water hammer in air-water, two-phase flows in hydraulic structures such as pressurized pipelines and tunnels, siphons, culverts, and junctions is of great importance for design purposes. Water hammer if combined with a periodic slug flow would lead to severe periodic transient pressure fluctuations inside the conduit. Laboratory experiments have been conducted to investigate water-hammer pressure inside a horizontal rectangular conduit carrying a two-phase, air-water slug flow. Tests were performed in an experimental apparatus comprising a 6.8-m-long transparent pipeline 0.06 m wide and 0.1 m high. By rapidly closing a control gate at the end of the conduit, propagating pressure surges were generated. Transient pressure fluctuations were recorded by means of pressure transducers. Furthermore, a digital camera was used to document flow properties and air-bubble characteristics throughout the pipeline. Pressure measurements along the pipe indicated that two scenarios could be considered as (1) below the gas pocket (Type 1), and (2) below the liquid column (Type 2). Results demonstrated that at the downstream sections, pressure oscillations in Type 2 are sharp, quickly damping, and associated with great maximum pressures (up to 50 times the initial pressure). However, other sections were observed to have low-frequency pressure oscillations, which were damped gradually. Likewise, the latter has also been observed throughout the conduit in Type 1. Results confirmed that the transient wave speed is no longer constant as in the single-phase flow, and it varies along the pipeline depending on variations in local pressure and local void fraction. It was found that besides the control gate, damping time in Type 2 increases with the air/water rates ratio. However, this parameter for Type 1 remains relatively constant and is independent of the air/water rates ratio.