In the case of equal layer depths and uniform vertical energy density, the quadratic integral invariants of two-layer rotating flow are close analogs of the corresponding invariants of two-dimensional turbulence. A simple theory based on the invariants and on the selection rules governing triad interactions qualitatively explains the major features of forced equilibrium flow. The general physical picture is very similar to that of Rhines (1977). In the geophysically interesting case. net baroclinic energy is produced at low wavenumbers and moves toward hisher wavenumbers in relatively nonlocal triad interactions which are unhampered by the constraint to conserve enstrophy. The energy converts to barotropic mode and moves back toward low wavenumbers in more local interactions which are similar to those in two-dimensional turbulence. Equilibrium wavenumber spectra are obtainable from a simple Markovian turbulence closure model in which the estimate of turbulent scramhling rate includes a contribution from vortex stretching along the axis of rotation. Numerical experiments with the closure model confirm the qualitative predictions and demonstrate the sensitivity of the flow at low wavenumbers to changes in the forcing and dissipation.