In recent years, spherical powders with no or minimal internal pores fabricated by the plasma rotating electrode process (PREP) have been highly recommended for powder-type additive manufacturing. Most research on PREP is aimed at establishing relationship between PREP parameters and powder size. However, almost no dedicated research on granulation behavior has been conducted so far. In the present study, PREP experiments of Ti64 and SUS316 alloys were carried out. Numerical modeling based on computational thermo-fluid dynamics was developed to analyze the granulation behavior. In particular, the roles of the additionally introduced gas blast and the morphology of the electrode end surface in fluid granulation were preliminarily investigated. The study showed that in addition to the electrode's rotating speed and diameter, manipulating the plasma arc current (i.e., the melting rate) could also be an effective way to control the PREP-powder size. According to the simulation, there were competing actions of the gas blast affecting the powder size. The gas blast created disturbance on the fluid and deepened the depression of the electrode end surface, which facilitated powder refinement. However, the cooling effect enhanced the fluid stability and hindered fluid granulation. The conclusions indicated the possibility of using various methods to manipulate PREP-powder size.