Double- to single-loop pattern transition and a significant reduction in the power number with a decrease in the clearance of the Rushton turbine impeller in a baffled reactor was elucidated in earlier research works. The present work investigates the physical reasons behind these phenomena using the computational fluid dynamics approach. The Reynolds Averaged Navier–Stokes equations with standard turbulence model closure were used to model the turbulent flow conditions in the reactor vessels. The Multiple Reference Frame (MRF) approach was adopted to model the impeller baffle interactions in the reactor vessels. The implicit Volume of Fluid (VOF) method was employed to simulate the aeration process in the reactor configurations considered. The development of a low pressure region below the impeller of a low clearance vessel deflects the discharge streams downward, leading to the formation of a single-loop pattern. The downward movement of the discharge streams reduces the vortex activity behind the impeller blades, leading to weaker form drag and a decrease in the power number of the impeller. Similarly, a high clearance vessel provides a low pressure region above the impeller which deflects the discharge streams above the impeller, resulting in a single-loop pattern and a considerable increase in the air entrainment due to superior vortex and turbulence activity present near the free liquid surface. The standard reactor vessel was found to provide superior bulk mixing of fluid as the overall turbulent dissipation rate is 35% more than that associated with low and high clearance vessels.