A windage and churning losses are main factors of the power loss in a high-speed gearbox. To reduce these losses, shrouding the gear is effective. For the shroud design the shroud shape, oil drain hole location, hole size and hole shape are important. Currently, to design the optimum shroud shape, many times of rig test has been done by trial and error. This trial and error is time consuming and costly. And it is difficult to design the optimum shroud by this method. Because the oil/air flow in the gearbox can not be evaluated. In order to understand the oil/air flow around the gear, CFD simulation method is developed. In this study the optimum shroud shape for a spiral bevel gear is investigated parametrically by the CFD simulation. Then based on the CFD simulation, some types of shrouds that is expected to reduce the losses effectively are selected and verified by the rig test. A base line shape of the shroud is that enclosing a whole of bevel gear as much as possible and restricting the pumping action by the gear teeth. Investigation parameters are (1) shroud shape at the heel side of the bevel gear (2) circular location, size and shape of the oil drain hole. The most effective shroud was determined by the rig test. This shroud reduced the loss by 36% compared to the unshrouded gear. The CFD simulation results agreed quantitatively with the rig test results. This CFD simulation technique can be also applied to the optimization of the oil scavenging and housing shape. It is anticipated that further power loss reduction can be achieved.