A numerical study of casing treatments on a centrifugal compressor to improve stability and stall margin is presented. High efficiency, high pressure ratio, and a wide operating range are required for a high-performance centrifugal compressor. A ring groove casing treatment is effective for flow range enhancement in centrifugal compressors. Compressor performance was analyzed according to the ring groove location, and the results were compared with the case without a ring groove. The effect of guide vanes in the ring groove was also investigated. Four variants of grooves were modeled and simulated using computational fluid dynamics to optimize the groove location. Numerical analysis was performed using a commercial code ANSYS-CFX program. The simulation results showed that the ring groove increased the operating range of the compressor. The ring groove with guide vanes improved both performance of the compressor at low flow rates and the stall margin of the compressor.