A liquid-gas two-phase computational fluid dynamics (CFD) model was developed to simulate flow field and gas hold-up in a pilot-scale oxidation ditch (OD). The volume of fluid (VOF) model and the mass flow inlet boundary condition for gas injection were introduced in this model. The simulated values of the flow velocities and the gas hold-up were verified by experimental measurements in the pilot-scale OD. The results showed that the gas hold-up at test-site 3, immediately downstream of the surface aerator, was the highest among all three test-sites. Most of the gas existed in the upper portion of the ditch and was close to the inner side of the channel. Based on the liquid-gas two-phase CFD model, three operating conditions with different setting height ratios of the submerged impellers were simulated. The simulated results suggested that the setting heights of the submerged impellers have significant impacts on the flow velocity distribution. Lowering the setting height could increase the flow velocity in the pilot-scale OD. An optimal setting height ratio of 0.273 was proposed, which would be beneficial for minimizing sludge sedimentation, especially near the inner side of the curve bend.