The negative effects caused by the gas in the downhole mixed fluid result in the reduction of oil-water separation efficiency, the decrease in oil recovery efficiency, and the increase in recovery costs. Therefore, this paper is based on the conventional axis-in liquid-liquid hydrocyclone, numerical simulation methods are adopted to analyze the influence of different gas phase volume fractions on the internal flow field changes of the separation system and the separation performance. It is shown by the results that, as the gas phase volume fraction within mixture gradually increases, the gas phase occupies and gathers at the effective position of the axial core region of the oil nucleus. A distinct gas nucleus is gradually formed. Eventually, most of the vortex field area is occupied by the formed hydrocyclone. Oil-phase volume fraction discharged through the overflow port is then reduced, a trend of a small decrease followed by a large decrease in oil-water two phase separation efficiency is observed. When gas-phase volume fraction within mixture is increased from 1 to 2%, the oil-water two phase separation efficiency is decreased from 98% to 83.4%. When the gas phase volume fraction within mixture is further increased to 20%, the oil-water two-phase separation efficiency is rapidly reduced to 3.5%. The increase in gas phase volume fraction is found to adversely affect the oil-water phase separation performance.