Ducted fans that are popular choices in vertical take-off and landing (VTOL) unmanned aerial vehicles (UAV) offer a higher static thrust/power ratio for a given diameter than open propellers. Although ducted fans provide high performance in many VTOL applications, there are still unresolved problems associated with these systems. Fan rotor tip leakage flow is a significant source of aerodynamic loss for ducted fan VTOL UAVs and adversely affects the general aerodynamic performance of these vehicles. The present study utilized experimental and computational techniques in a 22" diameter ducted fan test system that has been custom designed and manufactured. Experimental investigation consisted of total pressure measurements using Kiel total pressure probes and real time six-component force and torque measurements. The computational technique used in this study included a 3D Reynolds-Averaged Navier Stokes (RANS) based CFD model of the ducted fan test system. RANS simulations of the flow around rotor blades and duct geometry in the rotating frame of reference provided a comprehensive description of the tip leakage and passage flow. The experimental and computational analysis performed for various tip clearances were utilized in understanding the effect of the tip leakage flow on aerodynamic performance of ducted fans used in VTOL UAVs. The aerodynamic measurements and results of the RANS simulations showed good agreement especially near the tip region.