This study simulated the effect of steam injection on the performance and operation of a gas turbine combined heat and power (CHP) system. A commercial simple cycle gas turbine was analyzed. A full off-design analysis was carried out to investigate the variations in not only engine performance but also the operating characteristics of the compressor caused by steam injection. Variation in engine performance and operation characteristics according to various operation modes were examined. First, the impact of full steam injection was investigated. Then, operations aiming to guarantee a minimum compressor surge margin, such as under-firing and partial steam injection, were investigated. The former and latter were turned out to be relatively superior to each other in terms of power and efficiency, respectively.