Insufficient understanding of tip clearance on hydraulic and thrust performance is a major problem encountered in the design and application of the contra-rotating axial flow water-jet pumps. In order to investigate the effect of tip clearance on hydrodynamic and thrust characteristics of the pump, tip clearance coefficient σ is defined and scraping rate τ is introduced in this paper. Head coefficient and hydraulic efficiency are obtained with the numerical prediction and experiment as σ = 1 , which are in good agreement with each other. With the increase of σ , the saddle area of head coefficient slows down and the high efficiency zone narrows. Along the relative chord length of shroud of the rear rotor, the τ presents an opening down quadratic curve as 1 < σ < 4 , and if σ > 4 , it presents a "M" shape nearly. Comparing the two operating conditions of contra-rotating rotors and single rotor, the τ and wake effect of the rear rotor are enhanced and inhibited by the front rotor respectively for the interference between the two rotors, the thrust coefficient of the propulsion pump reaches the maximum when σ = 4. [ABSTRACT FROM AUTHOR]