The working capability of multi-stage pumps, such as electrical submersible pumps (ESPs) handling multiphase flow, has always been a big challenge for petroleum industries. The major problem is associated with the agglomeration of gas bubbles inside ESP-impellers, causing pump performance degradation ranging from mild to severe deterioration (surging/gas pockets). Previous literature showed that the two-phase performance of ESPs is greatly affected by gas involvement, rotational speed, bubble size, and fluid viscosity. Thus, it is necessary to understand which parameter is actually accountable for performance degradation and different flow patterns in ESP, and how it can be controlled. The present study is mainly focused on (1) the main parameters that impede two-phase performance of different ESPs; (2) comparison of existing empirical models (established for two-phase performance prediction and surging initiation) with our single-stage centrifugal pump results to determine their validity and working-range; (3) gas-handling techniques applied to enhance the multiphase performance of ESPs. Firstly, it aims at understanding the internal flow mechanism in different ESP designs, followed by test studies based on empirical models, visualization techniques, bubble-size measurements, and viscosity analysis. The CFD-based (computational fluid dynamics) numerical analysis concerning multiphase flow is described as well. Furthermore, gas-handling design methods are discussed that are helpful in developing the petroleum industry by enhancing the multiphase performance of ESPs.