Video images taken in the 2011 Tohoku Earthquake qualitatively showed that the Teizan canal has a potential for the reduction effect of tsunami disaster. The main purpose of this study is to examine the tsunami mitigation effect of the Teizan canal numerically with the numerical wave flume “CADMAS-SURF”. The numerical results revealed that the present Teizan canal has some effects on tsunami disaster reduction, such the time delay of tsunami run-up and the decrease of inundation depth. The prevention and mitigation functions of the canal for tsunami disaster were confirmed to go up by increasing the height of the dike and the width of the canal. Furthermore, the tsunami mitigation effect of the canal was found to be more efficient for small-scale tsunami than large-scale tsunami.