Pressure transient tests can provide useful information for characterization and evaluation of reservoirs under secondary and tertiary processes if they are properly designed and analyzed. There are a number of literature concerning the injection and falloff testing of water or gas injection wells. However, information available on immiscible water alternating gas (IWAG) injection tests is limited to falloff tests without considering the effect of trapped gas and capillary pressure. In this study, the pressure transient behavior of IWAG injection and falloff tests with and without relative permeability hysteresis and capillary pressure effects is investigated using simulated pressure data. The oil, gas, and water saturations distribution show that gas relative-permeability hysteresis improves the displacement of oil in IWAG injection. However, when capillary pressure is included, more oil is left behind the front. The pressure-derivative curves of falloff periods following gas injection period exhibit a long transition period with a half-slope line before the late-time radial flow for all cases, whereas, the pressure-derivative curve of the water injection falloff period after first gas injection for the case without hysteresis and capillary pressure exhibits a quarter-slope line in the long transition period. It is shown that trapped gas (or hysteresis in gas relative permeability) and capillary pressure have significant effects on the pressure and pressure-derivative behaviors of injection tests, but less effect on falloff tests. The findings of the study not only provide new insights to the pressure transient behavior of injection and falloff tests conducted during IWAG injection operations, but also should prove useful when properly interpreting and analyzing such tests. (C) 2015 Elsevier B.V. All rights reserved.