By substituting the straight tooth profile for the involute one, the internal gears with hard tooth face was easily grounded in form grinding. By means of the tooth contact analysis(TCA) technology and loaded tooth contact analysis(LTCA) technology, stress condition, load share between teeth, transmission error were studied, when meshing the internal gear with straight profile with involute external gear. The noise of the planetary reducers with both straight tooth profile internal gear and involute tooth profile was collected respectively by rig experiment. By analysing the collected data, the dynamic transmission performance of internal gear with straight tooth profile was studied. The internal gear with straight tooth profile has the performance of “edge trimming” and a much smaller transmission error variations under loading than no-loading, as a result, it is fully feasible to use the internal gears with straight tooth profile in industry.