In this paper, we consider a two-way or bidirectional communications system with a relay equipped with multiple antennas. We show that when the downlink channel state information is not known at the relay, the benefit of having additional antennas at the relay can only be obtained by using decode and forward (DF) but not amplify and forward (AF). The gain becomes significant when we employ transmit diversity together with wireless network coding. We also demonstrate how the performance of such system can be improved by performing antenna selection at the relay. Our results show that if downlink channel state information is known at the relay, network coding may not provide additional gain than simple antenna selection scheme.