We theoretically and computationally investigate the physical processes of slug-flow development in concurrent two-phase turbulent-gas/laminar-liquid flows in horizontal channels. The objective is to understand the fundamental mechanisms governing the initial growth and subsequent nonlinear evolution of interfacial waves, starting from a smooth stratified flow of two fluids with disparity in density and viscosity and ultimately leading to the formation of intermittent slug flow. We numerically simulate the entire slug development by means of a fully coupled immersed flow (FCIF) solver that couples the two disparate flow dynamics through an immersed boundary (IB) method. From the analysis of spatial/temporal interface evolution, we find that slugs develop through three major cascading processes: (I) stratified-to-wavy transition; (II) development and coalescence of long solitary waves; and (III) rapid channel bridging leading to slugging. In Process I, relatively short interfacial waves form on the smooth interface, whose growth is governed by the Orr–Sommerfeld instability. In Process II, interfacial waves evolve into long solitary waves through multiple resonant and near-resonant wave–wave interactions. From instability analysis of periodic solitary waves, we show that these waves are unstable to their subharmonic disturbances and grow in amplitude and primary wavelength through wave coalescence. The interfacial forcing from the turbulent gas–laminar liquid interactions significantly precipitates the growth of instability of solitary waves and enhances coalescence of solitary waves. In Process III, we show by an asymptotic analysis that interfacial waves achieve multiple-exponential growth right before bridging the channel, consistent with observations in existing experiments. The present study provides important insights for effective modelling of slug-flow dynamics and the prediction of slug frequency and length, important for design and operation of (heavy-oil/gas) pipelines and production facilities.