Pumping efficiency and rotordynamic stability are paramount to subsea multiphase pump operation since, during the life of a well, the process fluid transitions from a pure liquid to a mixture of gas in the liquid to just gas. Circumferentially grooved seals commonly serve as balance pistons in pumps while also restricting secondary flow. Prior experimental results obtained with a grooved seal operating with a mixture of air and mineral oil show the seal rotordynamic force coefficients vary significantly with the gas volume fraction (GVF). This paper, complementing an exhaustive experimental program, presents a computational fluid dynamics (CFD) analysis to predict the leakage and dynamic force coefficients of a circumferentially grooved seal supplied with air in an oil mixture with a GVF varying from 0 to 0.7. The test seal has 14 grooves, an overall axial length of 43.6 mm, and radial clearance of 0.211 mm. The 127 mm diameter rotor spins at constant angular speed (Ω = 3500 rpm). The mixture enters the seal at a supply pressure (Pin) of 2.9 bar(a), and the seal exit pressure (Pout) is 1 bar(a). The CFD two-phase flow simulations utilize the Euler–Euler multiphase model to predict the mass flowrate and the pressure field as a function of the operating conditions. Using a multi-frequency shaft orbit motion method, the CFD simulations deliver the variations of reaction force on the rotor with respect to the excitation frequency. For a pure liquid condition (GVF = 0), both the CFD and experimental results produce constant stiffness, damping, and added mass coefficients. The experimental and CFD results demonstrate the seal rotordynamic force coefficients are quite sensitive to the GVF. When introducing a small amount of air into the oil (GVF = 0.1), the direct damping coefficient increases by approximately 10%. For operation with a mixture with inlet GVF > 0.1, the cross-coupled stiffness coefficients develop strong frequency-dependent characteristics. In contrast, the direct damping coefficient has a negligible variation with excitation frequency. The CFD predictions, as well as the experimental results, evidence that air injection in a liquid stream can significantly change the seal rotordynamic characteristics, and thus can affect the rotordynamic stability of a pump. An accurate CFD analysis provides engineers to design reliable grooved seals operating under two-phase flow conditions.