In this paper, the aeromechanics of a cycloidal rotor (or cyclorotor) is investigated to understand the effect of blade flexibility on the performance of the rotor in hover. Toward this, experiments are conducted on cyclorotors using moderately and highly flexible blades. These studies show that, with increasing blade flexibility, the rotor thrust decreases; whereas the power consumption increases, leading to a significant drop in power loading (thrust/power). To investigate these phenomena, a coupled aeroelastic model of cyclorotor is developed by coupling an unsteady aerodynamics model with a beam-based structural model and is systematically validated with experimental results. The aerodynamic model contains rigorous modeling of various physics behind the operation of the cyclorotor, such as the nonlinear dynamic virtual camber, the effect of near and shed wakes, and the leading-edge vortex. In comparison with a second-order nonlinear structural model, inclusion of a geometrically exact structural model proves to be essential in accurate prediction of rotor deflections and performance. Based on a systematic analysis performed using the validated model, it is observed that the large torsional deflections of the blades are a key reason for the drop in thrust. The torsional deflections are mainly produced by centrifugal force and nonlinear moments due to bending curvatures.