In order to evaluate the tip-clearance effect on mixing, 3-D numerical simulations were applied to kneading block section of co-rotating twin screw extruders. The software we used was originally developed for non-Newtonian and non-isothermal flow analysis based on the finite element technique. The marker-particle tracking analysis was also developed in order to estimate the particle path, residence time distribution, stress and strain history, and so on. The stress distribution obtained by the above-mentioned simulations suggested the following mixing mechanisms. The kneading block with the small tip-clearance (TC) caused the bimodal stress distribution which had peaks in both high and low stress level. The marker-particles which overpassed the TC formed the peak at the high stress level and the other particles contributed to the peak at the low stress level. In other words, a large number of particles evaded the TC and it caused heterogeneous stress induced mixing. On the other hand, the large tip-clearance caused the narrow and sharp stress distribution because most of the particles passed over the TC. The stress level was not high, however homogeneous stress induced mixing was expected. Since the tip-clearance applied a significant effect to the dispersive mixing, it should be optimised in accordance with the material design.