This numerical study was to investigate the effect of $CO_2$ addition on the structures and NOx formation characteristics in $CH_4$ counterflow diffusion flame. The importance of radiation effect was identified and $CO_2$ addition effect was investigated in terms of thermal and chemical reaction effect. Also the causes of NOx reduction were clarified by separation method of each formation mechanisms. The results were as follows : The radiation effect was intensified by $CO_2$ addition. Thermal effect mainly contributed to the changes in flame structure and the amount of NO formation but the chemical reaction effect also cannot be neglected. The reduction of thermal NO was dominant with respect to reduction rate, but that of prompt NO was dominant with respect to total amount.