Measurements and theoretical analysis of the partition noise in a CW DFB (distributed-feedback) laser operating with two degenerate modes are described. The experiment used a novel two-electrode DFB laser in which two-mode degeneracy can be electrically controlled. The power ratio P+1/P-1, of the two modes was varied from 1:11 to 2500:1 for the measurements, while all the other side modes were suppressed by more than a 4000:1 ratio, and the partition fluctuations were analyzed. In addition to transient droputs, the two mode powers were observed to oscillate at approx. 1.3-GHz frequency, while the total power remained constant. The theory developed to explain the results is based on a Fokker-Planck equation which gives the probability distribution of the oscillation state of the laser, from which the transient dropout frequency is calculated. The calculated results are in good agreement with the experimental curves. The results indicate that both the transient dropouts and the two-mode relaxation oscillation become insignificant when the power ratio of the two DFB modes is higher than 500:1.