Low-solidity circular cascades have been applied successfully as a part of the diffuser system of a transonic centrifugal compressor. Three types of diffusers with and without an inlet passage width contraction or a pinch upstream of a cascade were tested. An appropriately contracted diffuser realized high compressor efficiency at high rotor speed due to the decrement in input power. Effects of a pinch on surge and choke were also discussed. Choke occurred at the throat of cascades of a pinched-type diffuser at lower flow rate than the inducer choke flow in spite of a low-solidity cascade. A pinched diffuser had a stabilizing effect on the diffuser characteristics but only a small amount of gain in the surge margin was obtained owing to the change in impeller characteristics.