Dual-mode muffler is a semi-active noise control device which can effectively reduce pressure drop and regenerative noise. Internal flow and noise attenuation principle of dual-mode muffler require in-depth analysis. Through flow field simulation, the reason why that dual-mode muffler can effectively reduce pressure drop is found and the structure is improved accordingly, reducing turbulent energy and pressure drop further. Resonance frequency is obtained by acoustic simulation when the valve is closed, which coincides with the calculation result of Helmholtz formula, proving that the effect of low frequency muffling comes from Helmholtz resonator. The principle of noise attenuation at low frequency is analyzed when the valve is open and it is concluded that the resonance frequency of the muffler shifts to the right after the valve is opened, by which the exhaust noise at different rotating speeds can be tracked.