Oil-free twin-screw compressors are essential in various industrial applications where clean compressed gas is required. Due to the absence of the cooling oil in these machines, thermal deformations are large. Hence, design clearances are generally set at a relatively large value of more than 150 μm. Leakage through these clearances are the primary source of flow loss. It is essential to predict the change of the gap size in operation accurately so that the design clearances can be minimised, allowing reliable operation and maximising compressor efficiency. To achieve this, CFD and Structural solvers were combined. The CFD model uses a single domain deforming grid of the twin-screw rotors generated in SCORG grid generator, together with ANSYS CFX flow solver. The thermal model of the rotors and housing uses ANSYS Structural solver. Two modelling systems were coupled bi-directionally to obtain variation in the radial leakage gap size for calculation of performance in the CFD model. The predicted compressor performance thus obtained was compared with measurements of flow, internal pressure-rise, power, specific power, volumetric and adiabatic efficiency. For the test case, three variations of radial gap size were evaluated, two of them with the uniform gap size of 10 μm and 160 μm and the third one with a variable gap size as predicted by the bi-directionally coupled model. The coupled model predicted this gap size to vary from 24 to 117 μm, thus predicting an improved flow and volumetric efficiency by 8.2%, lower indicated power by 2.5% and a higher adiabatic efficiency by 5.5%, in comparison to the design gap size of 160 μm. These predicted gap sizes could be used to improve the design clearances of the compressor by reducing them from 160 to 120 μm which would result in a better performance during operation.