In this study the effects of heat transfer on the rotorstator cavity temperatures and the characteristics of one industrial, single stage centrifugal compressor are examined. A baseline Computational Fluid Dynamics (CFD) analysis of the fluid with adiabatic (AD) boundary conditions is conducted. The relevant solid bodies are added to the model and a Conjugate Heat Transfer (CHT) calculation of the machine is performed. The two models are compared and validated by experimental data. Most research regarding heat transfer in centrifugal compressors focusses on turbocharger or gas turbine applications, where a significant heat flux from the adjacent turbine is expected. Industrial compressors are often treated as adiabatic. Some publications include the solid body of the impeller in the calculation, but cavities are often not in the focus of the study. Efforts to obtain reliable Heat Transfer Coefficients (HTC) by employing simple correlations for the impeller flow in the presence of a shroud cavity leakage have not yet proven to be successful. When comparing the CHT and the adiabatic model, differences can be observed in wall-and cavity flow temperatures. The adiabatic approach exceeds the measured cavity temperatures by 40%, whereas the CHT calculation yields significantly better results and stays within a margin of error of 1-4%. Additionally, the qualitative temperature distribution and calculated frictional power loss of both models differ noticeably. The bulk flow seems nearly unchanged and the adiabatic approach proves to be sufficient to describe overall compressor performance. Differences in efficiency, total pressure ratio and total temperature ratio between the two models are negligible. For machines engineered to maximum mechanical loads, with tight restrictions in fluid temperature, or if thermal expansion of the components is critical (e.g. tight sealing clearances), a CHT simulation is recommended for more accurate temperature predictions.