The use of two-phase ejectors to recover expansion work to improve COP of transcritical R744 systems has been the subject of numerous investigations during the past decade. However, there is little understanding as to how oil in circulation in different parts of the system is affected when a two-phase ejector is used to replace the expansion valve. This paper presents detailed measurement results conducted on a transcritical R744 ejector system using polyalkylene glycol (PAG) oil, demonstrating that at the same test condition, the oil circulation rates (OCRs) in different parts of the system can easily vary by an order of magnitude. The highest OCRs of approximately 10% by mass were measured close to the evaporator inlet. The influence of compressor speed, ejector motive nozzle needle position and evaporator inlet metering valve opening on the OCRs was investigated and it is explained why these condition changes will result in variation of oil in circulation.