This study investigated the axial two-phase flow evolution and interfacial area transport characteristics downstream of the mixing vane spacer grid (MVSG) in a tight lattice rod bundle channel with a subchannel hydraulic diameter of Dh = 17.27 mm. The experiment was conducted under the air-water two-phase flow at room temperature and atmospheric pressure. The phase distributions of 6 positions downstream of MVSG (Z/Dh = 9.15, 14.94, 20.73, 26.52, 32.31, and 61.26) were measured utilizing a self-developed double-layer wire-mesh sensor (WMS). 42 cases were obtained, involving the bubbly flow, cap-bubbly flow, and slug flow. Void fraction, bubble velocity, interfacial area concentration (IAC), and bubble size distribution (BSD) databases were built. Under the group-1 (G-1) flow, due to the swirling flow generated by MVSG, the G-1 bubbles were drawn from the bundle surface and the gap region into the subchannel center to form a spindle core-peak distribution. BSD results demonstrate that the swirling flow promotes bubbles’ coalescence. The one-dimensional (1-D) void fraction and IAC downstream of the MVSG decrease first and then recover, which contrasts with the non-mixing vane spacer grid (N-MVSG) effect. It was attributed to the increment of the bubbles’ velocity after MVSG due to the bubbles’ migration to the channel center and coalescence. Under the group-2 (G-2) flow, MVSG intensifies the core peak distribution of void fraction, and the void fraction profile is also spindle-shaped. The obvious bubbles’ break-up occurs at Z/Dh = 14.94 attributed to the swirling decay. The 1-D void fraction and IAC transport indicate, that with the liquid-velocity increment, the MVSG effect is different from the N-MVSG effect, which is mainly achieved by affecting the G-1 bubbles’ dynamic behaviors. The model evaluation utilizing the interfacial area transport equation (IATE) closing bubble interaction source/sink terms indicates that the advection effect dominates the IAC evolution and the contribution of the pressure effect is weak. The remarkable bubbles’ coalescence occurs under the high liquid velocity. In future studies, the additional bubble break-up and coalescence source/sink term model considering the MVSG effect should be developed based on these cases to improve the IATE prediction ability.