The characteristics of the flow and energy conversion in OMACON liquid-metal MHD system are investigated. Numerical simulation of two-phase flow in the OMACON system without magnetic field was carried out by the Phoenics code and the energy conversion characteristics are studied in association with the fact that the mechanical energy loss at the nozzle of the OMACON system are to be converted into electrical energy. In this system, working fluid (gas) is injected through the mixer located at the bottom of the riser, and is mixed with hot liquid metal. Therefore in the riser two-phase flow is developed under the influence of the gravity. In this study, the interaction between the gas and liquid is considered by the use of IPSA(InterPhase Slip Algorithm) where standard drag coefficient has been used. It has been assumed that in the flow regime the liquid is continuous and the gas is dispersed. For the liquid and gas, the continuity equations, momentum equations and energy equations are solved respectively in association with void fraction in the flow field. In order to calculate the energy conversion efficiency, firstly the ratio of the mechanical energy loss of liquid metal flow at the nozzle to the input thermal energy is considered. Secondly flow pattern of liquid metal in the generator has been analyzed, and the characteristics of the conversion of the mechanical energy into the electrical energy has been investigated. For an representative case where Hartmann number is 540 and magnetic field is 0.35 T, the present analysis shows that the energy conversion efficiency is 0.653. This result is considered to be reasonable in comparison with published experimental results.