Understanding drop formation of gel fuel is the first stage to conduct experimental investigation on combustion characteristics of single gel fuel droplet, and the formation of liquid drops at the end of a capillary tube is one of conventional methods. In order to investigate the formation of gel propellant drops at the end of a capillary tube, the Navier-Stokes equations were solved, and the VOF (volume of fluid) method is employed to track the gas/liquid interface during process of drop formation. The variation of dimensionless neck diameter DN/D0 and dimensionless drop height L/D0 with time was analyzed, which agreed with the existing experimental results and validated the numerical model. The results show that drop is not always at the steady state; there is high shear rate at the drop neck, leading to dynamic viscosity decreasing and drop pinch-off; then drop pinch-off, the part of conjoint drop, coalesces into drop rapidly, and high positive velocity appears; however, the part of conjoint capillary tube coalesces into gel propellant at the end of capillary tube rapidly, and the high negative velocity appears.