This paper deals with the computational fluid dynamics (CFD) analysis on effect of guide vane shape on performance of impulse turbine for wave energy conversion. Initially, experiments have been conducted on the impulse turbine to validate the present CFD method and to analyse the aerodynamics in rotor and guide vanes, which demonstrates the necessity to improve the guide vanes shape. The results showed that the downstream guide vanes make considerable total pressure drop leads low performance of the turbine and hence three-dimensional (3-D) inlet and downstream guide vanes have been designed based on well-known vortex theory to improve the efficiency of the turbine. In order to prove the improvement in efficiency due to 3-D guide vanes, CFD analysis has been made on impulse turbine with 2-D and 3-D guide vanes for various flow coefficients. As a result, it is seen that the present CFD model can predict the experimental values with reasonable accuracy. Also, it is showed from the numerical results that the efficiency of the turbine can be improved by average of 4.5 percentage points by incorporating 3-D guide vanes instead of 2-D guide vanes. The physical reason for improvement in efficiency of the turbine due to 3-D guide vanes has been explained with the CFD flow insight pictures. As the turbine operates in fluctuating flow conditions, the performance of the turbine with 2-D and 3-D guide vanes have been calculated numerically using quasi-steady analysis. Furthermore, the performance of the turbine has been predicted for one year based on Irish wave climate to show the feasibility of using 3-D guide vanes in actual sea wave conditions. Copyright (c) 2005 John Wiley & Sons, Ltd.