In the present study, a numerical investigation has been carried out into the fundamental problem of airflow past and heat transfer from a circular finned cylindrical tube, placed in a duct. The simulation is carried out using a finite volume method, based on laminar calculation of the transport quantities and employs an unsteady, 3-D, second order upwind scheme. As the work has importance in applications of air-cooled heat exchangers, practical values have been chosen for air velocity, air temperature, fin spacing and clearance between fin outer diameter and duct wall. In experimental determination of the performance of a finned-tube bundle, only overall average values such as drag coefficient and overall Nusselt number are possible. Local measurements are well nigh impossible, as any measurement instrument introduced into the narrow fin space will immediately change the flow field. This work gives an insight into variations of shear and heat transfer that will help the designer to optimize the fin spacing. The validity of the results for instantaneous velocity profiles and Nusselt number distribution comes from their physical plausibility. The agreement of the logical behavior of the studied variables when the fin space or fin clearance is modeled confirms the adequacy of the numerical simulation. The strong viscous effects caused by decreasing the fin space result in an increase in Cd and change in its frequency. Vortices generated on the rear section of the tube are damped, but the flow still shows small oscillations downstream of the tube, which indicates that vortex generation still exists, but has changed its location. Vortices augment the Nusselt number locally with increasing fin distance. Simultaneously, the opposite effect of converging boundary layers and therefore accelerated core flow in the fin space yields a maximum in the average Nusselt number as a function of fin space. The impact of decrease in the clearance between the tube and the duct wall is not as important as the effects of fin space.