Energy loss usually occurs within valves in the power hydraulic systems. The complexities of the valve geometry make it complicated to calculate the energy loss analytically. The flow characteristics inside a hydraulic spool valve and inside a proportional valve were investigated in this study using FLUENT code. Calculation of the energy loss needs calculation of both the flow rates and the pressure drop of the fluid through the valve. The relation between the pressure drop and the geometry of the valve was investigated in this study. Also the relation between spool position and energy loss across the proportional directional control valve was studied. Results showed a rapid increase in pressure drop as the flow rate increases. Simulation results also showed that the shape of the outlet port of the valve chamber has the most significant effect on the pressure drop across the spool valve. The study concluded that the modification of the geometry at the outlet area of the valve chamber is the most effective way to reduce the energy loss. On other hand, a proportional directional valve with different spool positions was simulated. Results showed that small openings or gaps of the spool create high turbulence, high velocity and high pressure variations at the exit and high pressure drop across the valve. All these cause high energy loss within the valve. © 2011 IEEE.