The performance of a transonic fan operating within nonuniform inlet flow remains a key concern for the design and operability of a turbofan engine. This paper applies computational methods to improve the understanding of the interaction between a transonic fan and an inlet total pressure distortion. The test case studied is the NASA rotor 67 stage operating with a total pressure distortion covering a 120-deg sector of the inlet flow field. Full-annulus, unsteady, three-dimensional CFD has been used to simulate the test rig installation and the full fan assembly operating with inlet distortion. Novel post-processing methods have been applied to extract the fan performance and features of the interaction between the fan and the nonuniform inflow. The results of the unsteady computations agree well with the measurement data. The local operating condition of the fan at different positions around the annulus has been tracked and analyzed, and this is shown to be highly dependent on the swirl and mass flow redistribution that the rotor induces ahead of it due to the incoming distortion. The upstream flow effects lead to a variation in work input that determines the distortion pattern seen downstream of the fan stage. In addition, the unsteady computations also reveal more complex flow features downstream of the fan stage, which arise due to the three dimensionality of the flow and unsteadiness.