This study investigates the influence of leakage through the apex seal, fuel type and recess size on the performance of a Rotary Engine. A commercial CFD software, Fluent, was applied and a two-dimensional model was constructed to predict the engine performance. Air and fuel flow into the chamber by two separate ducts in this model were used to simulate fuel-air mixing. Three different apex seal clearances (0mm, 0.4mm, 0.5mm) were simulated. The computations with two types of fuel, CH4 and C8H18, were performed and put in result comparison in this study. The recess sizes were based on three compression ratios, 8.33, 9.55 and 10.18. To simplify rotor mesh construction in the model with leakage, a porous region was generated to model this quite small gap. The generation of a porous region can greatly reduce mesh sizes and stabilize the numerical iterations. In the leakage analysis, the result showed that the formation of clockwise and counterclockwise vortices was induced by the rotor rotation when the air and fuel flow is charged into the intake chamber. In the compression chamber, the vortex close to the burning chamber makes fuel/air mixing better when the clearance increases. But in the opposite, the larger clearance is, the less amount of fuel is into the chamber due to the leakage. Also with leakage, the high pressure fluid in the combustion chamber went through the seal clearance into the neighbor compression chamber, and that drives the flame moving toward the compression chamber. Better fuel/air mixing was achieved and reacted, and thus the burning zone extended. Although the burning area increased and a better mixing was achieved in accordance with increasing leakage, lower pressure in the working chamber caused the indicated mean effective pressure to drop and then the performance of the engine decreased. Comparing with the numerical result of different fuels, C8H18 had a better combustion in the chamber and produced higher power. Decreasing the recess size, which increased the compression ratio, was beneficial to building up the pressure in the working chamber before ignition, and thus higher pressure in the burning stage resulted in higher power output.