Steady-state condensation in the presence of a noncondensable in a cocurrent two-phase channel flow is analyzed using a two-fluid model. The effect of noncondensables on the combined heat and mass transfer at the liquid-gas mixture interphase is accounted for by using the stagnant film model, and closure relations relevant to the annular-dispersed two-phase flow regime are applied. The conservation equations are cast into a system of coupled ordinary differential equations, which are numerically integrated. Model predictions are compared with published experimental data, with satisfactory results. It is shown that the two-fluid model can correctly predict all major data trends and is preferable to empirical methods.