The Kaplan turbine is an axial propeller-type turbine that can simultaneously control guide vanes and runner blades, thus allowing its application in a wide range of operations. Here, turbine tip clearance plays a crucial role in turbine design and operation as high tip clearance flow can lead to a change in the flow pattern, resulting in a loss of efficiency and finally the breakdown of hydro turbines. This research investigates tip clearance flow characteristics and undertakes a transient fast Fourier transform (FFT) analysis of a Kaplan turbine. In this study, the computational fluid dynamics method was used to investigate the Kaplan turbine performance with tip clearance gaps at different operating conditions. Numerical performance was verified with experimental results. In particular, a parametric study was carried out including the different geometrical parameters such as tip clearance between stationary and rotating chambers. In addition, an FFT analysis was performed by monitoring dynamic pressure fluctuation on the rotor. Here, increases in tip clearance were shown to occur with decreases in efficiency owing to unsteady flow. With this study’s focus on analyzing the flow of the tip clearance and its effect on turbine performance as well as hydraulic efficiency, it aims to improve the understanding on the flow field in a Kaplan turbine.