The effect of circumferential single grooved casing treatment on the stability enhancement of NASA Rotor 37 has been examined with computational fluid dynamics analysis. Stall inception mechanism of Rotor 37 is presented first with principal focus on the tip leakage flow behavior, passage blockage, and the vortical flow structures. Detailed observation showed that the combined interaction of the stagnated flow of tip leakage vortex breakdown and the jetlike leakage flow from the midchord region leads to the blade tip-initiated stall inception. The result of numerical parametric study is then demonstrated to show the effect of varying the axial location and the depth of a circumferential single groove. The evaluation based on stall margin improvement showed a higher potential of deeper grooves in stability enhancement, and the optimal position for the groove to be located was indicated to exist near the leading edge of the blade.