One of the important problems to be tackled in turbo machines is the leakage dynamics characteristics of labyrinth seals. In this paper we analyzed the effect of labyrinth seal structure and the change in fluid flow pressure on the leakage characteristics of seal. Computational fluid dynamics (CFD) model for 3D labyrinth seal was built which provides a basis for reducing steam flow excitation. The streamline pattern and the pressure drop characteristics for leakage of steam through a labyrinth seal was investigated. Simulations of internal flow and leakage characteristics had been performed by CFD software and Black-Child model. The results showed that the amount of leakage is directly proportional to the tooth gap and inlet pressure and inversely proportional to the cavity depth and outlet pressure. The proposed CFD model provides a feasible method to predict the leakage characteristics of labyrinth seal in response to the structure of seal and the change in inlet-outlet pressures.