The method of throat aeration was used to improve the performance of the annular jet pump (AJP). In order to study the influence of throat aeration on the performance and flow field of the AJP, the CFD method was used. The results show that at a low flow rate ratio ( q) the appropriate aeration rate can narrow or even eliminate the recirculation region. Meanwhile, the efficiency of AJP is improved at a medium-to-high q. Notably, the maximum increase in efficiency is 7.32% at q = 0.7 and the optimal aeration rate should be between 1% and 2%. Since the dynamic viscosity of air is much lower than water, a small amount of air attached to the wall can reduce friction loss. The air flows along the wall after the air aerated into the throat, reducing the shear stress between the high-speed jet and the wall. At a low q, most of the area in the throat is the high efficiency drag reduction region which the drag reduction rate exceeds 80%. Moreover, the high efficiency drag reduction region extends toward the diffuser when the q is high. In addition, throat aeration can optimize the pressure distribution near the wall and axis.