This study presents unsteady and unstable characteristics of three stage transonic axial compressor, developed by Korea Aerospace Research Institute. As approaching to the unstable operating region at the 103% design speed of the compressor, a modal type stall precursor appears in front of highly loaded 3rd rotor row at first, and it propagates to the upstream. On the contrary, actual stall cell initiates from the stall precursor in front of the 1st rotor row, and it propagates to the downstream of the compressor. After the stall region reached the 3rd stage and stall cell rotates circumferentially about 360 deg, it develops to one dimensional compressor surge mode. It shows a mild surge behaviour with 3~4 Hz frequency. From the test data, it can be suggested that there is a priority to give an optimum blade loading distributions to construct a multi stage transonic axial compressor stages either to secure more stable compressor operating ranges, or to maximize the compressor efficiency.