1,4-Dioxane is one of the most persistent organic micropollutants in conventional drinking-water-treatment processes. Vacuum ultraviolet (VUV) treatment is a promising means of removing micropollutants such as 1,4-dioxane from source water, but this approach has not yet been implemented in a full-scale water treatment plant, partly because the operating parameters for pilot and full-scale VUV photoreactors have not been optimized. Here, we developed a computational fluid dynamics–based method for optimizing VUV photoreactor performance through energy-based analyses that take into account the effects of two important operating parameters—flow rate and radiant exitance. First, we constructed a computational fluid dynamics model and determined the sole parameter required for the model, the pseudo-first-order rate constant for the reaction of 1,4-dioxane, by simple batch experiment. Then, we validated the model by using a pilot-scale flow-through annular photoreactor. Finally, we used the validated model to examine the effects of flow rate and radiant exitance on the efficiency of 1,4-dioxane degradation in a virtual annular photoreactor. Radiation efficiency, which was defined as the ratio of the logarithmic residual ratio of 1,4-dioxane to the theoretical minimum logarithmic residual ratio (best possible performance) under the given operating conditions, was calculated as an energy-based index of cost-effectiveness. Radiation efficiency was found to increase with increasing flow rate but decreasing radiant exitance. An electrical energy per order (EEO) analysis suggested that VUV treatment under laminar flow was most economical when low-power lamps and a high flow rate were used. In contrast, VUV treatment under turbulent flow was suggested to be most economical when high-power lamps were used at a high flow rate.