A study on the interference effects of overlapping tandem rotors in forward flight is conducted using the time-marching free-wake panel method which adopts field velocity boundary integral formulation. The conventional boundary integral formulation is numerically unstable for the cases when the blade and the wake are in close proximity to each other. In order to avoid this problem, this study applies the field velocity method and modifies the boundary integration formulation. The improved method is used for the parametric study on the advance ratio and the distance between the rotors. These are the parameters that most affect the interference of the tandem rotor in forward flight. Comparison of the aerodynamic performance shows that the horizontal distance between the rotors negligibly influences the overlap-induced power factor for high advance ratio. In addition, it shows that the overlap-induced power factor is inversely proportional to the squared vertical distance between the rotors, and that the overlap-induced power factor increases to a certain extent and decrease back as the advance ratio increases.