Closed-loop (CL) phase miscibility behavior of aqueous poly(ethylene oxide) (PEO) solutions was studied by means of molecular simulations and thermodynamic modeling. We first have performed a molecular dynamics (MD) simulation of PEO-water solutions. A careful MD procedure is established based on the corresponding experiments so that the correct surrounding conditions of the simulated cells are constructed. We computed radial distribution functions, number of hydrogen bonds, energy of mixing, mean-squared displacements, and radius of gyration with respect to the temperature. We found that hydrogen bonds between PEO and water decrease more rapidly than those of water and water with increasing temperature, indicating lower critical solution temperature (LCST) behavior. In the heterogeneous phase temperature range, both mixing energy and radius of gyration showed lower values than those of the homogenous phase, which correspond well with the CL type miscibility behavior. Secondly, a thermodynamic modeling technique is presented to quantitatively describe phase equilibrium, using the energy parameters obtained from molecular simulations. We calculated the CL temperature-composition phase diagram of PEO-water solutions using this modeling method and compared it with the experimental data. The calculated results are also consistent with the experimental data using only one scaling parameter. CL phase miscibility of PEO-water solutions is understood successfully by these two types of studies.