In this study, two phase gas-shear-thinning liquid flow in a square microchannel is numerically investigated using the coupled level set and volume of fluid (CLSVOF) methods. A systematic investigation is carried out to explore the influence of polyacrylamide (PAM) concentration, surface tension, velocity ratios, and contact angle on the gas slug length, volume, unit cell length, and pressure drop. Three different concentrations of PAM solutions, which exhibit shear-thinning behaviour are considered as the continuous phase. Gas slug length, volume, and unit cell length decreased with increasing the PAM concentration. Velocity and non-homogeneous viscosity distributions in the liquid slug for three different PAM concentration solutions are reported. Gas slug length decreases with an increase of the contact angle and the bubble shape change from convex to concave. This numerical work provides the fundamental insights in segmented flow formation and two-phase flow characteristics comprising shear-thinning liquids.