Natural convection in the annulus between a horizontal conducting tube and a cylinder with spacers has been studied by 2-dimensional numerical method with finite difference techniques. The effects of Rayleigh number, conductivities of conducting tube and spacer, and position of spacers were studied analytically. In case of vertical spacers, the maximum local Nusselt number appears at ${ heta}{approx}50^{circ}$ in a conducting tube and ${ heta}{approx}30^{circ}$ in an outer cylinder, The local Nusselt numbers show positive values on the lower spacer, but negative values on the surface of the upper spacer. In case of horizontal spacers, the flow over the spacer is more active than that of under the spacer as the Rayleigh number increases. The maximum local Nusselt appeares at ${ heta}=180^{circ}$ in a conducting tube and at ${ heta}=0^{circ}$ in an outer cylinder. The local Nusselt numbers show positive values on the upward surface, but negative values on the downward surface of spacer. As the dimensionless conductivity increases, the mean Nusselt number remarkably increases at $K_w/K_f<48$ and show almost even at $K_w/K_f{ge}48$. The mean Nusselt number of a conducting tube with vertical spacers is 5.12 percent less and with horizontal spacers is 11.33 percent less than that of a conducting tube without spacer at $Ra=10^4$, Pr = 0.7 and $K_w/K_f=48$.