A numerical study of a labyrinth-type turbine seal flutter in a large turbofan engine is described. The flutter analysis was conducted using a coupled fluid-structure interaction code, which was originally developed for turbomachinery blade applications. The flow model is based on an unstructured, implicit Reynolds-averaged Navier–Stokes solver. The solver is coupled to a modal model for the structure obtained from a standard structural finite element code. During the aeroelasticity computations, the aerodynamic grid is moved at each time step to follow the structural motion, which is due to unsteady aerodynamic forces applied onto the structure by the fluid. Such an integrated time-domain approach allows the direct computation of aeroelastic time histories from which the aerodynamic damping, and hence, the flutter stability, can be determined. Two different configurations of a large-diameter aeroengine labyrinth seal were studied. The first configuration is the initial design with four fins, which exhibited flutter instability during testing. The second configuration is a modified design with three fins and a stiffened ring. The steady-state flow was computed for both configurations, and good agreement was reached with available reference data. An aeroelasticity analysis was conducted next for both configurations, and the model was able to predict the observed flutter behavior in both cases. A flutter mechanism is proposed, based on the matching of the structural frequencies to the frequencies of waves traveling in the fluid, in the interfin cavities and in the high- and low-pressure cavities.