The density of tar vapor and water vapor produced by coal pyrolysis is different. Different centrifugal forces will be generated when they flow through the hydrocyclone. The water vapor and tar vapor are divided into inner and outer layers. According to this phenomenon, the moisture in the tar can be removed. In this paper, a Eulerian gas–liquid two-phase flow model is established by numerical simulation to study the effect of inlet velocity on the separation effect of a designed hydrocyclone (split ratio 0.2). The results show that the inlet velocity and moisture content have an influence on the volume distribution characteristics, tangential velocity, axial velocity, pressure drop distribution, and separation efficiency of tar vapor and water vapor in the hydrocyclone. When the inlet velocity increases from 2.0 to 12.0 m/s, the central swirl intensity increases, and the negative pressure sweep range at the overflow outlet increases. The axial velocity increased from 2.8 to 14.9 m/s, tar vapor content at the overflow outlet decreased from 74% to 37%, and at the underflow outlet increased from 89% to 92%. When the moisture content is lower than 10%, the hydrocyclone with the split ratio of 0.20 is no longer suitable for the separation of oil–water two-phase vapor. However, when the water content is higher than 20%, the purity of tar vapor at the underflow outlet can reach 92%, and the overflow outlet needs multistage separation to realize tar purification.