Transformation of gas-liquid flow in a horizontal pipe is investigated during the transition from stratified to annular flow pattern. Using Brightness-Based Laser-Induced Fluorescence technique, spatiotemporal evolution of liquid film thickness is analyzed over the downstream distance range of about 900 mm (45 pipe diameters), starting from the inlet. The measurements are carried out for three values of azimuthal angle θ: 0 (pipe bottom), 90°, and 180°, to track the circumferential spreading of liquid film and disturbance waves. At large gas velocities, thin liquid film is dragged upwards before the formation of large waves. The disturbance waves are created at the pipe bottom and spread circumferentially as they propagate downstream, over the already-wetted pipe walls. At large enough liquid flow rates, the spreading disturbance waves reach the pipe ceiling and form full rings around the circumference. The frequency and velocity of the disturbance waves eventually become the same around the pipe circumference; the disturbance wave amplitude and the base film thickness decrease with θ. The base film is more uniform around the circumference compared to the wave amplitude. At lower liquid flow rates, the disturbance waves cover only a part of pipe circumference. Their edges demonstrate oscillatory circumferential spreading, which ends by deceleration and decay of the edges. The upper part of the pipe may be wetted by a thin base film layer, covered only with ripples, or remain dry. At low gas speeds and large liquid flow rates, occasional splashing of large waves over the pipe ceiling without pre-wetting by the thin film is possible; however, the remaining film drains downward and no stable annular film is maintained. Liquid droplets, entrained from the pipe bottom and depositing in the upper parts of the pipe, are gathered in trains of creeping pendant droplets at the very top part of the pipe; no continuous wetting is achieved due to droplet deposition.