The shortage of natural uranium resources, nuclear waste disposal and nuclear proliferation issues are important constraints to the development of nuclear energy. The development and utilization of thorium fuel is an effective way to solve these problems. This paper analyses the neutron physical properties of micro-heterogeneous duplex fuel and compares them with UO2 fuel in terms of burnup depth, reactivity coefficients and radioactive waste. Additionally, the best grid of duplex fuel is explored as well.Results from this study show that the ThO2-UO2 duplex fuel can match the discharge burnup of UO2 fuel with the 235U enrichment greater than 5% but less than 20%. The reactivity was calculated at different levels of thorium dioxide fuel, and the rate of decrease in reactivity is lower for duplex fuel than for uranium dioxide fuel. Fuel temperature coefficient (FTC) and moderator temperature coefficient (MTC) are within the acceptable range specified for pressurized water reactors. Production of both weapons-grade plutonium and minor actinides are greatly reduced and the effect of fission nuclides breeding is significant. When the volume ratio of moderator to fuel is 3.27, the duplex fuel performs the best in burnup and the cycle burnup is greatly increased. It also has good performance on safety and nonproliferation issues under such grid condition.Physical calculations of assembly size were performed for 20% ThO2 duplex fuel at a volume ratio of moderator to fuel of 3.27 and compared them with the UO2 assembly calculations. Duplex fuel has higher cycle burnup and economy. Moreover, The negative FTC and MTC and the high control rod value of duplex fuel enable the reactor to be safe. Duplex fuel has a lower power peaking factor and a more uniform power distribution which are good for reactor operation.