Computational fluid dynamics (CFD) simulation can provide in-depth knowledge on hydrodynamics in slurry-bed reactors. The accuracy of CFD simulation is highly depending on the description of the interactions between gas phase and slurry phase with the drag model. Conventional drag models were usually developed for gas-liquid systems without considering the presence of particles in slurry-bed reactors. A modified drag model is proposed by taking into account the effect of particles. Simulation results proved the accuracy of the model in predicting hydrodynamics in the slurry bed. A higher particle concentration can increase the gas velocity and decrease the gas holdup due to the lower drag force between gas phase and slurry phase. The bubble size is predicted to be larger at higher particle concentrations due to the increased liquid eddy length scale. Considering the particle effect is critical for accurately simulating slurry-bed reactors.