To get an insight into the operating characteristics of the passive residual heat removal system of molten salt reactors, a two-phase natural circulation test facility was constructed. The system consists of a boiling loop absorbing the heat from the drain tank, a condensing loop consuming the heat, and a steam drum. A steady-state experiment was carried out, in which the thimble temperature ranged from 450°C to 700°C and the system pressure was controlled at levels below 150 kPa. When reaching a steady state, the system was operated under saturated conditions. Some important parameters, including heat power, system resistance, and water level in the steam drum and water tank were investigated. The experimental results showed that the natural circulation system is feasible in removing the decay heat, even though some fluctuations may occur in the operation. The uneven temperature distribution in the water tank may be inevitable because convection occurs on the outside of the condensing tube besides boiling with decreasing the decay power. The instabilities in the natural circulation loop are sensitive to heat flux and system resistance rather than the water level in the steam drum and water tank. RELAP5 code shows reasonable results compared with experimental data.