In aero-engine applications, centrifugal compressors are often close-coupled with their respective diffusers to increase efficiency at the expense of a reduced operating range. The aim of this paper is to show that state-of-the art steady-state computational fluid dynamics (CFD) simulations can model a hubside cavity between an impeller and a close-coupled diffuser and to enhance the understanding of how the cavity affects performance. The investigated cavity is located at the impeller trailing edge, and bleed air is extracted through it. Due to geometrical limitations, the mixing plane is located in the cavity region. Therefore, the previous analyses used only a cut (“simple”) model of the cavity. With the new, “full” cavity model, the region inside the cavity right after the impeller trailing edge is not neglected anymore. The numerical setup is validated using the experimental data gathered on a state-of-the art centrifugal compressor test-rig. For the total pressure field in front of the diffuser throat, a clear improvement is achieved. The results presented reveal a drop in stage efficiency by 0.5%-points caused by a new loss mechanism at the impeller trailing edge. On the hubside, the fundamentally different interaction of the cavity with the coreflow increases the losses in the downstream components resulting in the mentioned stage efficiency drop. Finally, varying bleed air extraction is investigated with both cavity models. Only the full cavity (FC) model captures the changes measured in the experiment.