Small reactors have the characteristics of modular, short construction period and flexible deployment, which can serve as a clean distributed energy source not only for supplying power but also for meeting various needs such as seawater desalination, heating supply for both residence and industry. As the core component of nuclear reactor, the performance of fuel element is the most important factor affecting the safety and economy. The double cladding of an annular fuel rod can significantly improve its thermal conductivity. This characteristic is helpful for designing reactors with smaller core volume, higher safety and better economy. The design of a small reactor using annular fuel can improve the power density and reduce the size of core at the same safety level, which is more conducive to the miniaturization of nuclear power plants and give full play to the advantages of annular fuel. In the paper, the application of annular fuel in small reactor is investigated by adopting the CMS to explore the feasibility of utilizing the advantages of annular fuel in the research and the development of small reactor. Through the calculation and analysis of the key performance parameters of the small reactor with annular fuel, the parameters such as the power inhomogeneity factor and the moderator temperature coefficient are in line with the requirements of the design guidelines, and the core has good steady-state physical properties, which shows that the application of annular fuel in small reactors is feasible, and that the annular fueled SMRs have a good prospect for development.