An experimental and theoretical study has been carried out to derive the wave height and transition criterion from wavy to slug flow in horizontal air-water countercurrent stratified flow conditions. A theoretical formula for the wave height in a stratified wavy flow regime has been developed using the concept of total energy balance over a wave crest to consider the shear stress acting on the interface of two fluids. From the limiting condition of the formula for the wave height, a criterion for transition from a stratified wavy flow to a slug flow has been derived. A series of experiments have also been conducted changing the non-dimensional water depth and the flow rates of air in a horizontal pipe and a duct. Comparisons between the measured data and the predictions of the present theory show that the agreement is within +/-1O%.