Understanding the interaction phenomena between the powder stream, the laser beam and the substrate is a key aspect for improving use of laser metal deposition. In this work, the powder stream is simulated under realistic deposition conditions. The stream of particles conveyed by inert gas through a coaxial deposition nozzle is first modelled and the interaction of particles with the laser beam investigated using a lumped capacitance approach, considering both particle heating and attenuation of the laser intensity. It is found that particles are initially rapidly heated while irradiated by the laser beam. This heating mainly depends on particle trajectory and incident energy, but attenuation also plays an important role. Experimental verification using stream imaging and deposition with a Laserline 1.5 kW diode laser shows good agreement between measured and simulated results. The model adds to existing models of the powder stream, and is capable of predicting particle trajectories, thermal and phase evolution.