Recent theoretical studies have shown that presence of plasma in the high power microwave sources, when properly introduced, may enhance the efficiency of the source. These findings have been confirmed by numerical simulations for some high power microwave sources. The enhancement has been partly attributed to the neutralizing effect of the positively charged plasma on lowering the disruptive space charge effects of the electron beam used to generate the rf. This attribute allows the se of higher current beams for more power. Another favorable effect of the presence of plasma might be a modification of the dispersion relation leading to higher group velocities for the travelling rf waves. This aspect of the plasma presence might help in designing more efficient rf extraction mechanisms. Mode selection may also be favorably affected by the presence of plasma in the source. Here we present the results of numerical simulations carried out to study the effect of plasma on a gyrotron device. Both neutral as well as positively charged plasmas have been explored. The gyrotron is run in TE01 mode and generates a 13 GHz steady oscillation without any competing modes. The effect of the plasma at several different densities has been explored. The presence of plasma at the densities explored do not show any significant enhancement of the gyrotron operation. Other plasma densities are being studied. The PIC codes used in simulations were the MRC 21/2 dimensional code MAGIC and the Phillips Laboratory 3-D code ICEPIC.