Three-dimensional effects in studying a vertical axis tidal current turbine are modeled using a newly developed vortex method. The effects on predicting power output and wake trajectory are analyzed in particular. The numerical results suggest that three-dimensional effects are not significant when the height of the turbine is more than seven times the turbine radius. Further discussions are presented focusing on the relationship between the turbine height and the angle of attack and the induced velocity on a blade of the turbine without arms. Besides the three-dimensional effects, arms effects are quantified with an analytical derivation of the polynomial formula of the relationship between arm effects and the tip speed ratio of the turbine. Such a formula provides a correction for existing numerical models to predict the power output of a turbine. Moreover, a series towing tank tests are conducted to study the three-dimensional effects as well as the arm effects. Good agreements are achieved between the results obtained with numerical calculations with the arm effects correction and the towing tank tests. Finally, three-dimensional effects are examined experimentally together with the arm effects by using an end-plate test, which suggests that the combinational effect is rather minimal. For turbine designers at the early design stage, we recommend that a two-dimensional model is acceptable considering the high cost of the three-dimensional model.