Numerical analysis model of an interlocking labyrinth seal (ILS), including 6 seal cavities and 7 seal teeth (3 teeth on the rotor, 4 teeth on the stator), is established for studying the effect of tilting rotor on its rotordynamic characteristics. The dynamic characteristic identification method based on infinitesimal theory is applied to solve the dynamic force coefficient of the annular seal with arbitrary elliptical orbits and eccentric positions under field conditions. The paper investigated the dynamic characteristics of the interlocking labyrinth seal with various misalignment angles (θ = 0, 0.1°, 0.2°, 0.3°, 0.4°, 0.5°, 0.6°), different pressure ratios (Pin = 6.9 bar, PR = 0.5, 0.8), locations of misalignment center (Loc = 0, L/2, L). Results show that the tilting rotor could minimize the leakage flow rate of the ILS. When the misalignment angle θ = 0.6°, the mass flow rate can be reduced about 2.5%. The tilting rotor will cause the geometric deformation of the ILS cavity and the changes in the radial clearance of the teeth, which results in an increasing pressure drop in the seal cavity. The effect of each cavity in the ILS on the stability of the system is different. The cavity with the inlet close to the rotor and the outlet away from the rotor helps to improve the system stability due to its locally anti-rotational flow. The effective damping of the entire ILS increases as the misalignment angle increases. The system shows the best stability when the misalignment center is close to the seal inlet. The stability of the seal cavity C1 can be improved for any misalignment centers. The stability of the seal cavity C2 decreases when the misalignment center moves toward the seal outlet. For the seal cavities C3∼C6, their stability can be improved for Loc = 0, L/2, and decreases for Loc = L. The tilting rotor has a positive effect on the stability of the ILS only except for high whirling frequency (> 100 Hz) under Loc = L.