In order to understand the coupled effect of the nacelle and exhaust system and to improve their overall performance, we studied the aerodynamic performance and the flow characteristics of the high bypass ratio turbofan nacelle and exhaust system by numerical simulation. The geometric parameters of a nacelle and exhaust system (e.g., the contraction ratio of the cowl afterbody and the fan nozzle exit angle) were investigated to evaluate their influence on the overall performance of the nacelle and exhaust system. The related flow mechanism was explored as well. The results show that the flow field of the nacelle and exhaust system under the mid-cruise condition exhibits characteristics of transonic flow. A stagnation zone exits at the nacelle lip and there is a velocity peak at the nacelle forebody. There exist a number of complex flow phenomena (such as shockwave, expansion wave, shear flow and shock wave-boundary layer interaction) in the downstream of the fan nozzle exit plane. The magnitude of the fan nozzle thrust or the intake ram drag is much higher than that of the additional drag, the nacelle drag or the core nozzle thrust. And for the nacelle drag, the friction drag of the cowl is in the same order of magnitude as the pressure drag of the cowl, the core cowl and the plug. But it is much larger than the friction drag of the core cowl and the plug. The effective thrust increases by ۴.۷% as the contraction ratio of the cowl afterbody increases; and it increases by ۲.۴% as the fan nozzle exit angle increases. The expansion degree of the fanjet flow, the shock wave strength and location, and the existence of the flow separation or second shock wave are influenced by the contraction ratio of the cowl afterbody and the fan nozzle exit angle. These phenomena have effects on the pressure distribution of the core cowl and the surrounding fanjet flow velocity, and hence they further affect the nacelle drag. The increase in the fan nozzle exit angle can noticeably reduce the thrust of the fan nozzle.