In the present study, a novel optical technique has been devised for identification of flow patterns during liquid-liquid two-phase upflow through a vertical pipe. It is based on the difference in optical properties of the two phases and estimates the flow patterns on the basis of the proportion of light attenuated and scattered by the two-phase mixture. The nonintrusive measurement system comprises a laser source and a photodiode sensor located on the diametrically opposite position of the test pipe. The light incident on the photodiode is converted to a voltage signal by a processing circuit and recorded in a PC via a data-acquisition system. Two types of statistical analysis, namely, the probability density function analysis and the wavelet resolution technique of the probe signals, have been adopted for a better understanding of the flow phenomena. The distribution has been observed to be bubbly at low flow rates of both the liquids. Core annular flow has been identified at high kerosene velocities. The transition from bubbly to core annular flow occurs through a chaotic distribution of both the liquids where the dominating phase shifts from water to kerosene. This is named as the churn flow pattern. The information thus obtained has been represented as a flow-pattern map. The flow-pattern map has been compared with the existing theoretical and empirical models.