In the present study, flow characteristics were investigated experimentally using particle image velocimetry technique (PIV) in a gap between a solid cylinder and a shroud to reveal the effect of shroud diameter (D-s) and porosity (beta) on the vortex shedding mechanism of the cylinder. Porosity (varied from beta = 0.3 to 0.7) and diameter ratio (D/D-s = 0.4, 0.5 and 0.6) were main parameters examined at a Reynolds number of Re = 5000. For the porosity values of beta <= 0.5, it is observed that vortex formation of the cylinder occurs only in the gap and shroud produces its own wake flow patterns. Penetrating flow through the shroud extends the shear layers on the both sides of the shroud through the downstream direction and prevents the interaction of shear layers in the near wake region. The diameter ratio and the porosity are impactful on the wake flow patterns in outer region of the shroud since they are determinant of the penetrating flow rate. Force measurements were also performed in the air tunnel in order to reveal the effect of shroud on the drag coefficient of cylinder. It is found that the drag coefficient of the cylinders are reduced significantly by shrouds when compared with that obtained from the bare cylinder case. However, the drag coefficient of the cylinder together with the shroud is higher than the bare cylinder for all cases since the shrouds enlarge the area exposed to the flow.