Disc centrifuges have been widely applied, particularly in oil dewatering. Literatures are sparsely particularly that of test work and simulation with PBM model on this aspect. The oil dewatering performance of a disc centrifuge has been studied with both test and simulation, which was based on population balance model (PBM). The gradient of the concentration and size of water droplets has been revealed. The results show that the simulation of PBM model is more realistic; the coalescence probability of water droplets is much greater than the fragmentation probability; due to the coalescence behavior of water droplets, the oil–water separation process will be easier; and the separation efficiency will be 1%–2% higher than that of conventional Euler–Euler model. In addition, when the separation efficiency reaches the peak, the optimal disc gap is about 0.5 mm.