The nozzle of annular jet pump (ATP) is annular and the secondary flow is encircled by the primary flow which is of great differences with that of central jet pump (CP). Since the high velocity working flow soaring out the annular nozzle adheres to the inner wall, the cavitation is considerably easy to be induced at the intersection of the suction chamber and the throat. This paper mainly investigated the inception and development of the cavitation in an ATP under different flow rate ratio q by numerical methods and the results was validated by the experimentation. The turbulent model is set as Realizable k-epsilon model, which combined with the mixture multiphase model and the Schnerr-Sauer cavitation model. The SIMPLEC algorithm is applied to solve the coupling of pressure and velocity. The simulated results confirms well with experimental data. As the working condition varies, specifically when the pressure of the outlet decreases to a certain value, the intersection of the suction chamber and the throat sees the inception and development of the cavitation and the bubble generates there adheres to the inner wall. With the decreasing outlet pressure, the cavitation region expands to the diffuser along the inner wall, and also to the axis. When the cavitation region develops to the axis and the pressure there reaches to the critical cavitation pressure (generally vapor pressure), the pump turns into the operation limits and the efficiency drops abmptly. Furthermore, when the flow rate ratio q is considerably low (generally <0.2), the shearing layer and the center of the recirculation also experience the cavitation inception. It is for this reason that the relationship between the critical cavitation number sigma(c), and the cavitation flow rate ratio q(c) can be divided into two parts. When sigma(c)<0.3 I, it varies little with the increasing q(c), while it increases linearly with the increasing q(c) when ranging from 0.31 to 1.58.