Abstract The induced two-phase natural circulation flow and the critical heat flux (CHF) on the outer surface of lower head are crucial factors for the assessment of the external reactor vessel cooling (ERVC) under in-vessel retention which is considered as an effective management strategy to mitigate the core degradation accident. In this work combined with the two-phase drift flux model, an analysis program for the induced two-phase circulation flow has been established based on one-dimensional steady-state mass, momentum and energy conservation equations. The calculation results are compared with the simulation results using RELAP5 within the same geometric parameters to verify the rationality and correctness of the analysis program. Combining the analysis program with the SULTAN CHF correlation, the characteristics of induced two-phase flow and the CHF on the outer surface of lower head are studied comprehensively to analyze the coolability limits of ERVC under in-vessel retention. The effects of concerned parameters including subcooling of water, decay power of molten corium, flooding levels, height of riser channel, loss coefficient at the inlet and gap clearance between the reactor pressure vessel and thermal insulation are studied.