Hydrodynamic aspects on three-dimensional effects were investigated in this study for simple and convenient conversion of tidal stream energy using a Vertical-Axis Turbine (VAT). Numerical approach was made to reveal the differences of flow physics between 2-D estimation and rigorous 3-D simulation. It was shown that the 3-D effects were dominant mainly due to the variation of tip vortices around the tip region of rotor blade, causing the loss of lift for steadily translating hydrofoil and the reduction of torque for rotating turbine blade. The 3-D effect was found to be rather prominent for the typical VATs considered in this paper. Simple and yet efficient 2-D approach with the correction of its three-dimensionality was also proposed for practical design and analysis of VAT.