The oil industry uses gas separators in production wells as the free gas present in the suction of the pump reduces the pumping efficiency and pump lifetime. Therefore, free gas is one of the most important variables in the design of pumping systems. However, in the literature there is little information on these separators. It is the case of the inverted-shroud gravitational gas separator. It has an annular geometry due to the installation of a cylindrical container in between the well casing and production pipe (tubing). The purpose of the present study is to understand the phenomenology and behavior of inverted-shroud separator. Experimental tests were performed in a 10.5-m-length inclinable glass tube with air and water as working fluids. The water flow rate was in the range of 8.265–26.117 l/min and the average inlet air mass flow rate was 1.1041 kg/h, with inclination angles of 15 , 30 , 45 , 60 , 75 , 80 and 85 . One of the findings is that the length between the inner annular level and production pipe inlet is one of the most important design parameters and based on that a new criterion for total gas separation is proposed. We also found that the phenomenology of the studied separator is not directly dependent on the gas flow rate, but on the average velocity of the free surface flow generated inside the separator. Maps of efficiency of gas separation were plotted and showed that liquid flow rate, inclination angle and pressure difference between casing and production pipe outlet are the main variables related to the gas separation phenomenon. The new data can be used for the development of design tools aiming to the optimized project of the pumping system for oil production in directional wells.