Flue gas mainly consists of N-2 and CO2 and is applied in petroleum industry as a kind of displacement agents. In this paper, flue gas was introduced into the thermal recovery process of thick heavy oil reservoir. First, the PVT experiments under different conditions were carried out to research the dissolution of flue gas in crude oil. Then, a series of 3D physical simulations were performed to study the oil displacement characteristics of flue gas coupled with steam flooding in a thick reservoir with consideration of the important production parameters inducing oil production, oil-to-steam ratio (OSR), water cut, and oil recovery in both the steam-flooding process and the process of steam flooding coupled with flue gas. Finally, the enhanced oil recovery mechanisms of flue gas coupled with steam flooding for thick heavy oil reservoirs were summarized on the basis of the experimental results. This study provided a reference that the reasonable use of flue gas can improve recovery of thick heavy oil reservoirs while reducing greenhouse gas emissions.