In order to improve the efficiency of hydraulic gear pumps or motors especially for high operating pressure, power losses due to viscous friction and leak flow through gear teeth end-gaps are considered in this paper. Optimal gaps minimizing the power loss for pumps and motors with uniform heights of gaps are analysed first. And the effect of the shapes of gaps with unequal heights on the power loss are studied and discussed by simulation. Considering that the outer shell lacing gear teeth may expand due to high internal pressure or thermal stress, the results drawn in this paper can be used for the design of high efficiency pumps and motors.