This study experimentally investigates the thermal-hydraulic performance and flow instability characteristics of a two-phase natural circulation loop (NCL) using the FASSIP-06 facility, representative of passive heat removal systems in advanced water-cooled reactors. The system comprises a water heating tank (WHT), a water cooling tank (WCT), and a rectangular loop with a 3-inch hot leg and 1-inch cold leg operating at atmospheric pressure. Heater power (3000-4000 W) and coolant flow rate in the WCT jacket (3-7.5 LPM) were systematically varied to assess their effects on circulation dynamics. Temperature distributions were measured using 16 thermocouples, while volumetric flow rate was monitored by a magnetic flowmeter and supported by flow visualization in a transparent riser. Increasing heater power from 3000 W to 4000 W enhanced steady-state circulation by up to 33% in volumetric flow rate. The operating point of 4000 W and 7.5 LPM achieved the fastest transient response, reaching steady state at 4863 s with the highest outlet temperature and flow rate, but also exhibited the strongest oscillations. In contrast, 3000 W and 5 LPM produced the most stable operation with longer stabilization time and reduced oscillation amplitude. Flow visualization at 3000 W and 3 LPM documented transitions from bubbly to slug, churn, and annular flow between 85 °C and saturation. The resulting benchmark data and identified stability window support the design and optimization of two-phase NCL-based passive cooling systems for small modular and advanced reactors. © Published under licence by IOP Publishing Ltd.