Numerical study with detailed chemistry has been conducted to investigate the effect of CO2 addition on flame structure and NOx formation in CH4-air counterflow diffusion flame. Radiation effect is found to be dominant especially at low strain rates. The addition of CO2 makes radiation effect more remarkable even at high-strain rates. It is, as a result, seen that flame structure is determined by the competition between the radiation and strain rate effects. The important role of CO2 addition is addressed to thermal and chemical reaction effects, which can be precisely specified through the introduction of an imaginary species. Thermal effect contributes to the changes in flame structure and NO formation mainly, but the effect of chemical reaction cannot be neglected. It is noted that flame structure is changed considerably due to the addition of CO2, in such a manner, that the path of methane oxidation prefers to take CH4 --> CH3 --> C2H6 --> C2H5 instead of CH4 --> CH3 --> CH2 -->- CH. Copyright (C) 2001 John Wiley & Sons, Ltd.