Modern analysis techniques that provide improved viability have enabled further investigation of plug nozzle rocket engines as advanced launch vehicle concepts. A plug nozzle for future single-stage-to-orbit vehicles in China has been designed, and the flow field in the plug nozzle has been studied numerically for different ambient pressures. Calculations were performed by solving the Navier-Stokes equations for an ideal gas. Turbulence is modelled using the k-ε turbulence model. The advantages of the plug nozzles are the external expansion, which automatically adapts to external pressure variations, and the short compact design for high expansion ratios. Expansion waves, compression shocks, and the separated base flow dominate the flow structures and affect the plug nozzle rocket engine performance.