In this article aerodynamic effects of tip clearance on a heavy duty axial turbine are studied. Three different tip clearances are considered for each rotor. For simplicity, a simple tip profile is assumed and cooling air is not modeled. Aerodynamic behavior of all stages is studied in terms of polytropic efficiency, leakage mass flow, secondary and total losses, penetration length, and total mass flow rate for different pressure ratios. Also three well established correlations of tip clearance loss are compared with CFD results to obtain the best model for performance calculation of such a large-scale turbine. The steady states, viscous and compressible flow governing equations representing the flow field with k-epsilon turbulence model are solved using commercial code ANSYS CFX.12. Useful data are presented to predict the variation of efficiency of each individual rotor, as well as entire turbine, as a function of relative tip gap (k/h). This information may be useable in design and troubleshooting. According to the results, even though pressure drop in rear stages across tip gap is lower than pressure drop in front stages, leakage mass flow rate is considerably high for this LP stages. Consequently, tip clearance losses of rear stages have significant effect on the entire turbine efficiency.