Annular fluidized bed reactor possesses a compact structure and higher thermal efficiency, having a good application prospect. The analysis on the heat transfer inside annular fluidized bed is presented. First, the analytic method has been used. In order to study steady heat transfer in the reactor, a kind of computational model is established. And then the C language is used for programming and solving the process. As the result, the relationship between various parameters of reactor and fluidized gas velocity is carried out. With the numerical method, the heat loss per unit length and temperatures on the each wall of the reactor are obtained by simulation. These values are related with the speeds used in the analytic method, respectively. These results have been compared with the analytic one. The results show that the heat transfer coefficients increase with the rise of fluidized gas velocity. The temperature on the outer wall of combustion chamber decreases, meanwhile the temperature on the outer wall of insulation layer increases. The heat loss per unit length is also on the rise. All above results are obtained with the fluidized gas velocity ranged from 0.02m/s to 0.24m/s. Comparing with the conventional reactor, the heat loss of an annular fluidized bed reactor is much lower. And the results of both methods are consistent with each other. These two methods provide useful guidance for analyzing the effect of heat transfer in a fluidized bed reactor.