A circulating fluidized bed (CFB) with a hybrid design has been developed and optimized for steam hydrogasification. The hybrid CFB is composed of a bubbling fluidized bed (BFB) type combustor and a fast fluidized bed (FB) type gasifier. Char is burnt in the combustor and the generated heat is supplied to the gasifier along with the bed materials. Two different types of fluidized beds are connected to each other with a newly developed partitioned loop seal to avoid direct contact between two separate gas streams flowing in each fluidized bed. Gas mixing tests were carried out with Air and Argon in a cold model hybrid CFB to test the loop seal efficiency. Increase in solid inventory in the loop seal can improve the gas separation efficiency. It can be realized at higher gas velocity in fast bed and with higher solid inventory in the loop seal system. In addition, bed hydrodynamics was investigated with varying gas flow conditions and particle sizes in order to obtain a full understanding of changes of solid holdup in the FB. The solid holdup in the FB increased with increasing gas velocity in the BFB. Conversely, increase in gas velocity in the FB contributed to reducing the solid holdup in the FB. It was observed that changing the particle size of bed material does not have a big impact on hydrodynamic parameters.