When wood pellets with high moisture content are used as fuel, the generation of tar during the combustion process increases. As a result, various problems occur, including decrease in thermal efficiency, increase in emission of polluting gases, and the need to clean the combustion chamber. To address this problem, this research applied refractory insulation where a fluid dynamics simulation indicated that thermal stresses most severely occurred, and cleaning was most often required. The fire tube and baffle were then modified to compensate for the decrease in efficiency. A modified boiler was manufactured based on the simulation, and the experiment was performed. Under the no-tar condition, the thermal efficiencies of the control and modified boilers were found to be 92.20% and 90.63%, but once tar had accreted onto the combustion chamber walls, the modified boiler is more efficient at 82.55% compared to 81.79% for the control boiler. The changes in thermal efficiency due to the presence of tar were predicted using computational fluid dynamics simulations of no-tar and tar-accreted conditions, showing 91.83% and 85.25%, respectively, in the control and 92.05% and 87.18%, respectively, in the modified boiler, providing good agreement with the experimental results. (C) 2018 Elsevier Ltd. All rights reserved.