Flow distribution and heat split are the key phenomena of annular fuel, which will have an important impact on its thermal hydraulic characteristics. Since the annular fuel has inner and outer gaps, the change of the heat transfer coefficient of the gaps will change the heat distribution of the fuel. It is very necessary to carry out the thermal–hydraulic and fuel performance coupling calculation for the analysis of the thermal–hydraulic characteristics of the annular fuel. Therefore, an internal coupling analysis method of sub-channel code and fuel performance analysis code has been developed in the paper. The thermal–hydraulic parameters and mechanic performance parameters of the annular fuel assembly in the steady-state operation stage have been analyzed. Due to the change of the gap size, the heat transfer coefficients of the inner and outer gaps will also continue to change, resulting in continuous changes in the heat split of the inner and outer channels, which will affect key thermal hydraulic parameters such as coolant temperature, and DNBR continuously. The mechanical behavior of the fuel is more intense under higher fuel temperature and higher burnup, and the inner gap closure occurs earlier. After the inner and outer gaps are closed, the stress of the inner and outer cladding has abrupt changes, which will test the integrity of the cladding.