Abstract: An improved shrouded fan assembly (10, 10') is disclosed which forms a labyrinthian seal between a plurality of fan blades (20, 20') and an annular ring (16, 16') mounted to a non-rotating shroud (15, 15') without the use of a rotating annular shroud. The tip of at least one fan blade (20, 20') defines a slot (21, 21') adapted to receive the annular ring (16, 16') to form a labyrinthian seal therewith. The improvement increases fan efficiency by decreasing undesirable air flows in the shroud gap between the shroud (15, 15') and the tips of the fan blades (20, 20').