Modern turbomachinery favors pocket damper seals (PDS) which produce more effective damping than labyrinth seals (LS). Liquid tolerant compressors enable deep sea oil and gas (O&G) facilities; and seals supplied with a two-phase flow can have an impact on the stability and leakage of O&G turbomachinery. This paper details results for the leakage and force coefficients of a stepped shaft PDS and LS. The seals operate with speeds up to 5250 rpm and pressure ratios (inlet/exit) = 2.5–4.2. The seals are supplied with an oil-in-air mixture with liquid volume fraction (LVF) up to 10%. Both seals feature the same shaft diameter D = 127 mm, axial length L = 0.38D, four blades (and eight pockets). The LS has a 15% larger clearance than the PDS. Operating with pure gas, the PDS is 25% more effective to restrict leakage than the LS. The effective clearance of the PDS decreases as LVF increases whereas that for the LS increases. The direct stiffness (K) for both seals is small and becomes negative as LVF increases. The PDS produces greater direct damping (C) when operating with an identical LVF. The PDS C grows as the LVF increases. Predictions of leakage agree with measurements, whereas force coefficients are roughly half of the experimental results. Changes in LVF produced subsynchronous vibrations (SSV) in the PDS, but not so in the LS. The results are a reference for the design of seals operating with two-phase flow.