A computational study has been conducted to analyze the performance of a centrifugal compressor under various levels of impeller-diffuser interactions. The study has been conducted using a low solidity vaned diffuser (LSVD), a conventional vaned diffuser (VD) and a vaneless diffuser (VLD). The study is carried out using Reynolds-Averaged Navier-Stokes simulations. A commercial software ANSYS CFX is used for this purpose. The intensity of interaction is varied by keeping the diffuser vane leading edge at three different radial locations. Frozen rotor and transient simulations are carried out at four different flow coefficients. At design flow coefficient maximum efficiency occurs when the leading edge is at R3 (ratio of radius of the diffuser leading edge to the impeller tip radius) = 1.10. At lower flow coefficient higher stage efficiency occurs when the diffuser vanes are kept at R3=1.15 and at higher flow coefficient R3=1.05 gives better efficiency. It is observed that at lower flow coefficients positive incidence causes separation of flow at the suction side of the diffuser vane. When the flow rate is above design point there is a negative incidence at the leading edge of the diffuser vane which causes separation of flow from the pressure side of the diffuser vane. Compressor stage performance as well as performance of individual components is calculated at different time steps. Large variations in the stage performances at off-design flow coefficients are observed. The static pressure recovery coefficient (Cp) value is found to be varying with the relative position of impeller and diffuser. It is observed that maximum Cp value occurred at time step where y loss value is lowest. From the transient simulations it has been found that the strength and location of impeller exit wake affect the diffuser vane loading which in turn influences the diffuser static pressure recovery. © 2010 by ASME.