This paper presents a numerical study of casing treatments on a centrifugal compressor stage to improve stability and the surge margin. High efficiency, a high pressure ratio, and a wide operating range are required for a high performance centrifugal compressor. In the present study, a ring groove arrangement was applied to the transonic centrifugal compressor. According to the numerical analysis using a commercial code ANSYS-CFX, the unstable phenomena limiting the range of the centrifugal compressors were compared with and without a ring groove. Although the ring groove decreased the efficiency, but increased the operating range by suppressing a flow separation at the leading-edge of the impeller especially near shroud part. Newly designed ring groove arrangement improved the compressor performance and increased the operating range of the compressor.