Prediction of the tip clearance noise (TCN) of axial compressors is essential to accurately determine the noise level of the compressor, because it is left unattenuated during propagation. The existing studies on numerical methods are inadequate for accurate determination of the TCN owing to the limited understanding of the physical phenomenon. The most convincing explanation is that the TCN is generated because of the instability in shear waves in the tip clearance region. In this study, the rotating instability theory was developed further by modeling the physical phenomenon of the instability as a Taylor-Couette (T–C) flow. The TCN sources were obtained using T–C flow modeling, and duct noise analysis was performed to obtain the TCN at various locations and frequencies. The TCN predictions were compared with the existing experimental results and noise results obtained using FW–H. Results showed that the T–C flow modeling is sufficiently accurate for predicting the frequencies, wavenumber distributions, and SPL of the tip clearance noise of axial compressors.