This paper presents theoretical and experimental studies on the stratification decay in stratified storage tanks. The effects of the thicknesses of tank wall and thermal insulation were discussed. The experimental results showed that the outside insulation can enhance tank wall axial conduction which tends to degrade the stratification. However, the reduction of heat loss outweighs the enhancement of axial conduction and better stratification is still maintained when compared to a bare wall tank. The axial conduction enhancement is sensitive to the wall thickness for the same thickness of insulation, however, it is not strongly dependent on the insulation thickness for identical thick wall. The addition of inside insulation is helpful in preserving stratification. A two-dimensional laminar flow model was also developed to interpret the temperature and flow fields inside storage tanks and the numerical results were compared with the experimental data.