The design of the diffuser system immediately downstream of the impeller is considered. The diffuser transforms the kinetic energy at its inlet into a rise in the static pressure. Centrifugal compressors are usually fitted with either a vaned or a vaneless diffuser leading to a collector. The diffuser meridional channel comprises an annular channel extending radially outwards from the impeller outlet, usually of the same width as the impeller. The simplest diffuser system is a radial vaneless annular channel where the radial velocity component is reduced by the increase in the area of the channel with radius (conservation of mass) and the circumferential velocity component is reduced by the increase in radius in the diffuser (conservation of angular momentum). In a vaned diffuser, of which several types are considered, there is a small vaneless region upstream of the diffuser vanes. The vanes themselves form flow channels designed to decelerate the flow more than is possible in a vaneless diffuser by turning the flow in a more radial direction. The different zones of pressure recovery in vaned diffusers are examined and compared with the equivalent planar diffuser.