In this study, a modeling approach is developed to examine laminar flow effects on the rotordynamic behavior of high-speed mini rotating machinery with a moderate flow confinement. The existing research work mostly focuses on the flow-induced forces in small gap systems, such as bearings and seals, in which the flow is mostly laminar and inertia effects are ignored. In other studies, medium gap systems are analyzed, taking the inertia effects into consideration, but the surrounding flow is considered as turbulent. However, in high speed mini rotating machinery, the large clearances and the high speeds make the inertia effects significant, even in the laminar flow regime. In the current study, the flow-induced forces resulting from the surrounding fluid are analyzed and these models are combined with the structural finite element (FE) models for determining the rotordynamic behavior. The structure is analyzed with finite elements based on Timoshenko beam theory. Flow-induced forces, which include inertia effects, are implemented into the structure as added mass-stiffness-damping at each node in the fluid confinement. The shear stress is modeled with empirical and analytical friction coefficients, and the stability, critical speeds, and vibration response of the rotor is investigated for different friction models. In order to validate the developed modeling approach, experiments were conducted on a specially designed setup at different support properties. By comparing the experiments with the theoretical models, the applicability of the different friction models are examined. It was found that the dynamic behavior is estimated better with empirical friction models compared to using the analytical friction models.