This dissertation is on a study of 2-string free tangle decompositions of knots with tunnel number two. As an application, we construct infinitely many counter-examples to a conjecture in the literature stating that the tunnel number of the connected sum of prime knots doesn't degenerate by more than one: t(K_1#K_2)≥ t(K_1)+t(K_2)-1, for K_1 and K_2 prime knots. We also study 2-string free tangle decompositions of links with tunnel number two and obtain an equivalent statement to the one on knots. Further observations on tunnel number and essential tangle decompositions are also made. / text