A gas turbine engine with pulse detonation combustion (PDC) gives a higher performance compared to that with constant pressure combustion. The main problems with PDC are unsteady operation and higher temperatures. To overcome these difficulties, air-argon dual loop gas turbine engine (DLGTE) with water injection in the argon circuit is proposed in this article. It consists of an open cycle gas turbine engine with PDC and a closed cycle gas turbine engine. A recuperator is used to exchange the heat energy between the hot detonation products of the open circuit and the compressed argon gas of the closed circuit to adjust the temperature to turbine inlet temperature (TIT). Pressurized hot water is also injected into the compressed argon just before the recuperator to reduce the mass of argon circulated per kg air. The thermodynamic cycle ofoperation of DLGTE is analyzed based on quasi-steady one dimensional (QSOD) formulation to simulate the engine performance with and without water injection. It is found that DLGTE with PDC achieves 27 to 37% thermal efficiency as against 25 to 31% of base line gas turbine engine (BLGTE) depending on the cycle pressure ratios and TITs. The specific work output of DLGTE is found to increase from 600 to 935 kJ/kg air as against 180 to 275 kJ/kg air of BLGTE.