The primary focus of rate transient analysis (RTA) is put on the estimation of the reserves of gas/water reservoirs. RTA based on the single-phase assumption is limited to gas/water two-phase flow in the development of the material-balance time function. This work aims to propose a practical approach for analyzing production data from wells exhibiting gas/water two-phase flow during both infinite-acting flow (IAF) and boundary-dominated flow (BDF) periods. In this work, we present a comprehensive pseudopressure-based solution associated with the constitutive saturation/pressure (Sw/p) relationship. The pseudovariables, namely pseudopressure and β-factor, have the ability of handling the two-phase nonlinearities in the governing flow equations of gas and water phases and generating the required benchmark analytical solutions for liquid flow equation. By integrating the liquid-type solutions with the principle of Duhamel convolution, a set of gas/water-phase productivity equations are recast for wells producing at different operating conditions, including constant bottomhole-pressure, constant rate and steplike change in bottomhole-pressure/rate. The presented solutions provide a theoretical framework for developing two-phase RTA based on two-phase material-balance pseudotime (MBPT). The RTA method is validated against synthetic cases generated from numerical simulation, and the dependability of two-phase MBPT is also corroborated in detail. A field case example is analyzed to demonstrate the practical applicability of this method. The RTA method provided herein accounts for all flowing phases in the reservoir, and serve as an alternative to numerical model history matching for estimating original gas in place (OGIP) and original water in place (OWIP).