We investigate the coupling effects of the two-phase interface, viscosity ratio and density ratio of the dispersed phase to the continuous phase on the flow statistics in two-phase Taylor–Couette turbulence at a system Reynolds number of
$6\times 10^3$
and a system Weber number of 10 using interface-resolved three-dimensional direct numerical simulations with the volume-of-fluid method. Our study focuses on four different scenarios: neutral droplets, low-viscosity droplets, light droplets and low-viscosity light droplets. We find that neutral droplets and low-viscosity droplets primarily contribute to drag enhancement through the two-phase interface, whereas light droplets reduce the system's drag by explicitly reducing Reynolds stress due to the density dependence of Reynolds stress. In addition, low-viscosity light droplets contribute to greater drag reduction by further reducing momentum transport near the inner cylinder and implicitly reducing Reynolds stress. While interfacial tension enhances turbulent kinetic energy (TKE) transport, drag enhancement is not strongly correlated with TKE transport for both neutral droplets and low-viscosity droplets. Light droplets primarily reduce the production term by diminishing Reynolds stress, whereas the density contrast between the phases boosts TKE transport near the inner wall. Therefore, the reduction in the dissipation rate is predominantly attributed to decreased turbulence production, causing drag reduction. For low-viscosity light droplets, the production term diminishes further, primarily due to their greater reduction in Reynolds stress, while reduced viscosity weakens the density difference's contribution to TKE transport near the inner cylinder, resulting in a more pronounced reduction in the dissipation rate and consequently stronger drag reduction. Our findings provide new insights into the physics of turbulence modulation by the dispersed phase in two-phase turbulence systems.