Various type of rotary unions are widely used to provide fluids between rotating parts. To prevent fluid leakage, most of the rotary unions adopt mechanical seals which is highly reliable but too expensive and complicate. In this paper, a simple lip seal system made of PTFE is adopted in designing of a compact rotary union. Using MARC, the behavior characteristics of lip seal are investigated for seal mounting process, and obtained variations of contact pressure distribution and contact width with interferences and fluid pressures. The results showed that contact width are increased with interference and pressure. The maximum contact pressure are also increased up to a certain interference and pressure, however, then decreased. The numerical methods and results can be applied in designing and performance improvement of lip seal adopted rotary union, and further extensive studies are required.