We study discrete-time quantum walks on the line and on general undirected graphs with two interacting or noninteracting particles. We introduce two simple interaction schemes and show that they both lead to a diverse range of probability distributions that depend on the correlations and relative phases between the initial coin states of the two particles. We investigate the characteristics of these quantum walks and the time evolution of the entanglement between the two particles from both separable and entangled initial states. We also test the capability of two-particle discrete-time quantum walks to distinguish nonisomorphic graphs. For strongly regular graphs, we show that noninteracting discrete-time quantum walks can distinguish some but not all nonisomorphic graphs with the same family parameters. By incorporating an interaction between the two particles, all nonisomorphic strongly regular graphs tested are successfully distinguished.