The axial flow pump is a low head, high discharge pump usually applicable in drainage and irrigation facilities. A certain gap should be reserved between the impeller blade root and the impeller hub to ensure the blade adjustability to broaden the high-efficiency area. The pressure difference between its blade surface induces leakage flow in the root clearance region, which decreases hydraulic performance and operational stability. Therefore, this study was carried out to investigate the effect of root clearance on mechanical energy dissipation using numerical simulation and entropy production methods. The numerical model was validated with an external characteristics test, and unsteady flow simulations were conducted on the axial flow pump under four different root clearance radii. The maximum reductions of 15.5% and 6.8% for head and hydraulic efficiency are obtained for the largest root clearance of 8 mm, respectively. The dissipation based on entropy theory consists of indirect dissipation and neglectable direct dissipation. The leakage flow in the root clearance led to the distortion of the impeller’s flow pattern, and the indirect dissipation rate and overall dissipation of the impeller increased with increasing root clearance radius. The inflow pattern in the diffuser was also distorted by leakage flow. The diffuser’s overall dissipation, indirect dissipation rate on the blade surface, and indirect dissipation rate near inlet increased with increasing root clearance radius. The research could serve as a theoretical reference for the axial flow pump’s root clearance design for performance improvement and operational stability.