There is a general cognition existing in the Insulation projection that as long as the insulation material is thick enough, insulation material would play a role in reducing heat loss. The principle of Heat Transfer shows that the thickness of the insulation layer should have a positive contribution in reducing heat loss, however, what have a prerequisite that pipe diameter must be greater than the critical heat insulation diameter. but when environment in a certain circumstances, the critical heat insulation diameter depends on the physical properties of insulation materials. When the pipe diameter less than the critical heat insulation diameter, heat loss but will increase. This paper analyzes the relationships of insulation thickness, pipe diameter and critical heat insulation diameter, and the effects on pipe insulation in these relationships; Simulating the same pipe with different insulation material and comparing them in the help of computational fluid dynamics simulation software --- Fluent. Came to the conclusion: in pipe insulation, especially for the smaller diameter pipe insulation, pay attention to the choice of insulation materials.