In　this　paper,　the　tip　clearance　effects　on　the　aeroelastic　stability　of　a　last-stage　steam　turbine　model　are　investigated.　Most　of　the　unsteady　aerodynamic　work　contributing　to　flutter　of　the　long　blades　of　the　last-stage　of　a　steam　turbine　is　done　near　the　tip　of　the　blade.　The　flow　in　this　region　is　transonic　and　sensitive　to　geometric　parameters　such　as　the　tip　clearance　height.　The　KTH　Steam　Turbine　Flutter　Test　Case　was　chosen　as　the　test　case,　which　is　an　open　geometry　with　similar　parameters　to　modern　free-standing　last-stage　steam　turbines.　The　energy　method　based　on　3D　URANS　simulation　was　applied　to　investigate　the　flutter　characteristics　of　the　rotor　blade　with　five　tip　gap　height　varying　from　0-5%　of　the　chord　length.　The　numerical　results　show　that　the　global　aerodynamic　damping　for　the　least　stable　inter-blade　phase　angle　(IBPA)　increases　with　the　tip　gap　height.　Three　physical　mechanisms　are　found　to　cause　this　phenomenon.　The　primary　cause　of　the　variation　in　total　aerodynamic　damping　is　the　interaction　between　tip　clearance　vortex　and　the　trailing　edge　shock　from　the　adjacent　blade.　Another　mechanism　is　the　acceleration　of　the　flow　near　the　aft　side　of　the　suction　surface　in　the　tip　region　due　to　the　well-developed　tip　leakage　vortex　when　the　tip　clearance　height　is　greater　than　2.5%　of　chord.　This　causes　a　stabilizing　effect　at　the　least　stable　IBPA.　The　third　mechanism　is　the　oscillation　of　the　tip　leakage　vortex　due　to　the　blade　vibration.　This　has　a　negative　influence　on　the　aeroelastic　stability.