The conical liquid sheet formed by a swirl nozzle was numerically investigated by volume-of-fluid (VOF) in this paper. With increase of Reynolds number (Re), the breakup process of the conical liquid sheet was dominated successively by rim, rim-perforation, perforation, perforation-wave and wave disintegration modes, which agreed well with the experiment results. For the perforation disintegration mode, several kinds of hole in the liquid sheet were successfully predicted, such as isolated holes and group holes. The expansion speed of the hole varied with the time in an exponential form at the initial stage of hole growing, and then kept constant at Taylor-Culick speed. That was the reason why there were two views on the expansion speed of the hole. A model to predict the expansion speed and the rim radius of the hole was proposed and well validated by the numerical results. The flow instability in the conical liquid sheet was successfully predicted, and its wave length was corresponding with Reitz wave instability model. Based on such flow instability, the mechanism of perforation formation was revealed. At the superimposed position of surface wave troughs, fluid migration from this position to its surrounding stretched the liquid sheet thinner and thinner, and finally made it collapsing. Thus, the perforation of the liquid sheet was an intrinsic performance induced by flow instability of liquid sheet itself, rather than the environmental factors. Furthermore, based on the such perforation mechanism, a perforation-time model is proposed, which is reasonable to predict the formation process of hole.