Abstract Drag torque reduction is one of the key targets to improve the efficiency of transmission. Drag torque is generated by the automatic transmission fluid (ATF) that is circulated in the gap between the friction disks and separator plates for cooling purpose. Due to the relative motion between the friction disks and separator plates in disengaged mode, a shear stress is developed on the disks’ wall which gives rise to drag loss. The most conventional technique to suppress the drag loss is to cut grooves on the friction disk to facilitate smooth and faster discharge of the ATF. The shape of the grooves also plays a substantial role on the drag torque characteristics. Previously, we presented a simplified simulation model to predict the drag torque behavior of different grooves. However, the simplified model doesn’t include the oil inflow and outflow behavior from the oil inlet and outlet holes respectively. In this research, we presented an improved simulation model with an extended simulation domain to consider the effect of oil inflow and outflow behavior on the drag torque. This model helps us to realize the influence of the groove size and shape on the multi-phase drag torque behavior in more detail. The comparative profile of different grooves obtained from simulation reflects close similarity with the test result. Therefore, the simulation model leads to a convenient method of optimizing the size and shape of the grooves and plays a pivotal role to select better groove pattern for the suppression of drag loss. Introduction In a gasoline vehicle, about 5-6% of the total fuel energy is wasted due to inefficiency of transmission and other parts of the driveline [1-2]. A clutch is one of the important components of the powertrain assembly and consists of multiple number of friction disks and clutch plates. An automatic transmission fluid (ATF) is furnished in between the friction disks and separator plates to cool them. When the clutch is disengaged, the friction disk and separator plates are always in relative motion which causes shearing of the fluids film and gives rise to drag loss [2-3]. This undesired drag loss reduces the efficiency of transmission and increases the fuel consumption of a car. Therefore, it is of interest for transmission engineers to understand the physics of this kind of flows and identify design variables and parameters that dictate the loss mechanism so as to minimize the loss in engineering practice. Previous researches show that cutting grooves on the friction disks, increasing clearance, reducing oil flow rate and temperature suppress the drag loss to a great extent [ 3, 4, 5, 6, 7, 8, 9]. However, changing the clearance, oil flow rate and temperature cannot be adopted for suppressing the drag loss due to system constraint. Therefore, cutting grooves and optimizing the shape of the grooves are the only viable means for drag torque reduction. Different groove patterns will have different levels of drag torque reduction. In the state of the art transmission clutch industry, optimum groove design is selected via conducting multiple tests with many different samples. This method is time consuming and causes a huge wastage of raw materials and money. Instead, computational fluid dynamics (CFD) simulation can be a very effective means to realize the fluid flow behavior in the clutch pack and the contribution of the groove shape on the fluid dynamics. Despite, the availability of many powerful simulation softwares, the outcome of simulation doesn’t always become congruent to the test results. The reason of conflict between the test and simulation results can be attributed to inappropriate selection of the mesh models, physics models, simulation domain and boundary conditions. Recently, we presented a multi-phase simulation model and discussed the significance of mesh models and physics models in detail [ 7]. Yiqing et al. and Anand et al. also presented multi