In the two-group interfacial area transport equation (IATE) used to calculate the interfacial area concentration, ai bubbles are categorized into two groups. Namely, group-I consists of spherical/distorted bubbles, and group-II consists of cap/slug/churn-turbulent bubbles. Robust models for the major bubble interaction mechanisms that cause the transition from purely onegroup to two-group flows are essential to the dynamic closure of the two-fluid model with the two-group IATE. Therefore, the present study seeks to establish an experimental database in capbubbly flows that highlights this transition to support model development. A four-sensor conductivity probe is used to obtain measurements of local time-averaged two-phase flow parameters, including the void fraction and ai in vertical-upward air-water two-phase flow in a 5.08cm pipe. Four flow conditions are investigated at <jf>=2m/s with increasing <jg> to study the generation and growth of group-II bubbles. Characteristic features of the local void fraction and ai distributions are discussed. Additionally, axial development of area-averaged void fraction and ai that is indicative of exchange between the bubble groups is presented.