Purge air is injected through seals in the hub and shroud of axial turbines in order to prevent hot gas ingestion into the inter-stage gaps. An investigation into the losses involved with the injection of purge air has been undertaken, with the objectives of answering where the losses are generated, how they are generated, and what are the most effective ways for reducing them. In order to address these questions, a consistent framework for interpreting entropy generation as a measure of loss is developed for turbomachinery applications with secondary air streams. A procedure for factoring out distinct effects is also presented. These tools, applied to steady computations, elucidate four mechanisms by which change in loss generation is brought about due to injection of purge air: a shear layer between purge and main streams, interaction with the passage vortex system that generates radial velocity gradients, changes in wetted loss and tip clearance flow due to an increased degree of reaction, and the potential for reducing tip clearance flow for the case of purge flow injected from the shroud. An emphasis is placed on tracing these effects to specific purge flow characteristics that drive them. The understanding gained provides a rationale for the observed sensitivity of purge flow losses to the design parameters purge air mass fraction and swirl, compared to purge slot axial inclination and gap width. Preswirling of purge flow is less effective in mitigating losses in the case of shroud-injection, since there is a tradeoff with the tip clearance flow suppression effect.