Studying the dynamic aerodynamic characteristics and flow field characteristics for the dynamic mode transition in the variable cycle compression system (VCCS) can guarantee that the variable cycle engine (VCE) achieves high performance and stable mode transition. The common quasi-steady state analysis method cannot reflect the transient performance of the dynamic mode transition. Moreover, the dynamic simulation based on the dynamic grid technology will encounter the problem of negative volume grids because the adjustment range of variable components for VCCS is usually very large. To solve the problem, a dynamic simulation method based on real-time variation for geometry and aerodynamic boundaries of the dynamic mode transition in VCCS is first established in this paper. Using this method, the dynamic simulation was completed for the couple adjustment process of the outer bypass valve and variable stators of the dynamic mode transition in VCCS. The results of the dynamic simulation are compared with the quasi-steady state results. The results show that the rotor work ability and stator separation degree are affected by the stator variable angle degree and the mass flow rate (MFR) during the dynamic opening process of the outer bypass valve. For the MFR variation of 14.8%, when the stator variable angle is small (less than 3.3° in this study example), the flow separation on the variable stator blade pressure surface is increased during the dynamic opening process of the outer bypass valve. And the work ability of the downstream rotor is weakened. Therefore, in order to reduce the flow separation of stator blades with a small variable angle during the dynamic opening process of the outer bypass valve, a larger positive incidence angle can be adopted for stators at a small bypass ratio. For the whole dynamic process, the variation trend of the rotor work ability and stator separation state is opposite in the opening and closing process of the outer bypass valve. However, there is a dynamic effect of the flow field variation lagging behind the geometry variation in the opening and closing process. Therefore, the transient flow field in the opening and closing process is different from the quasi-steady state results, and the difference is more significant in the case of a small valve opening. Under a small valve opening, the work ability of the stage before the outer bypass entrance in the open process is significantly smaller than that in the closing process. And the difference in the flow field is mainly that the stator separation state of the stage before the outer bypass entrance in the open process is significantly weaker than that in the closing process. Therefore, the dynamic effect of the opening and closing process is more significant under a small valve opening, and the flow stability problem is more likely to occur during the dynamic mode transition in VCCS.