A probe for bubble measurement by the use of infrared laser was developed to investigate the effects of a magnetic field on the dynamic characteristics of bubbles in magnetic fluid two-phase flow in a vertical pipe. The transition condition from bubbly flow to slug flow under non-magnetic field was different from that in the traditional two-phase flow pattern map. When the magnetic field was applied to the magnetic fluid two-phase flow, large bubbles increased and the spaces between bubbles became narrower in the upstream of the position of maximum magnetic field strength. The bubbles were broken into small bubbles near the position of maximum magnetic field strength and the number of the large bubbles decreased in the downstream of the maximum magnetic field strength.