Industrial trends are presenting major challenges and opportunities for research on two-phase flows in microchannels. Semiconductor companies are developing 3D circuits, for which multilevel microfluidic cooling is important. Gas delivery microchannels are promising for PEM fuel cells in portable electronics. However, data and modeling are needed for flow regime stability, liquid entrainment/clogging, and bubble inception/departure in complex 2D and 3D geometries. This paper provides an overview of the Stanford two-phase microfluidics program, with a focus on recent experimental and theoretical progress. Microfabrication technologies are used to distribute heaters, thermometers, pressure sensors, and liquid injection ports along the flow path. Liquid PIV quantifies forces on bubbles and fluorescence imaging detects flow shapes and liquid volume fraction. Separated flow models account for conjugate conduction, liquid injection, evaporation, and a variety of flow regimes. This work benefits strongly from interactions with semiconductor and fuel cell companies, which are seeking validated models for product design.