In this study, a high-fidelity Monte Carlo model was utilized to investigate the localized behavior of the power peaking factor in a reactor core. The model considered the effect of water gaps, also known as flux traps, on the local power peaking. The model, developed using the Serpent code, employs a fine spatial mesh to accurately describe the fission power and burnup distribution. The results obtained from the model were validated through comparison with experimental measurements of the power distribution obtained from the IRR1 facility. The study found that the local accumulation of thermal flux caused by enhanced neutron moderation in the flux trap leads to a highly localized increase in power density, affecting the power peaking factor. The quantification of this effect was a key finding of the study. The results obtained from the study were highly dependent on the model’s fidelity, with significant differences being observed between the power peaking factor calculated on a fine mesh as opposed to that calculated at the plate or assembly scale. Furthermore, the experimental validation of the model enabled the prediction of the power peaking factor in other regions within the fuel assembly, which are not accessible to measurement instrumentation, with a high degree of confidence. The study’s findings may be useful for optimizing reactor design and operation and assessing the safety margins in reactors with similar characteristics.