Effects of air injection on a centrifugal compressor performance are studied numerically and results are presented in this paper. Flow field is simulated based on solution of the Reynolds-Averaged Navier-Stokes equations utilizing the well-known k-ε turbulence modeling. To find optimum arrangement of the air injectors, including their numbers, positions and setting angles and also their mass flow rates, 10 different cases were proposed in this investigation. Results of velocity and pressure fields and streamlines patterns on various blade-to-blade and streamwise planes provided necessary data for analyses and discussions. These results revealed that a proper air tip injection can weaken the tip leakage flow strength and alleviate the blockages to the main stream near the casing. Hence, this technique can be used to extend the stable operating range of the compressor and delay the probable stall commencement. In addition, compressor can produce higher pressure ratios in cases of proper injections in comparison to no-injection case. Optimum injection configuration improved the stall margin of the proposed compressor by nearly 15.8%. Numerical results for no-injection case were compared with those of the authors own experimental works carried out on a proper test rig, which showed close agreement.