One of the major technical challenges in using carbon dioxide ( CO2 ) as part of the cushion gas of the underground gas storage reservoir ( UGSR) is the mixture of CO2 and natural gas. To decrease the mixing extent and manage the migration of the mixed zone, an understanding of the mechanism of CO2 and natural gas mixing and the diffusion of the mixed gas in aquifer is necessary. In this paper, a numerical model based on the three dimensional gas-water two-phase flow theory and gas diffusion theory is developed to understand this mechanism. This model is validated by the actual operational data in Dazhangtuo UGSR in Tianjin City, China. Using the validated model, the mixed characteristic of CO2 and natural gas and the migration mechanism of the mixed zone in an underground porous reservoir is further studied. Particularly, the impacts of the following factors on the migration mechanism are studied:the ratio of CO2 injection, the reservoir porosity and the initial operating pressure. Based on the results, the optimal CO2 injection ratio and an optimal control strategy to manage the migration of the mixed zone are obtained. These results provide technical guides for using CO2 as cushion gas for UGSR in real projects.