The viability of boundary layer ingesting (BLI) engines for future aircraft propulsion is dependent on the ability to design robust, efficient engine fan systems for operation with continuously distorted inlet flow. A key step in this process is to develop an understanding of the specific mechanisms by which an inlet distortion affects the performance of a fan stage. In this paper, detailed full-annulus experimental measurements of the flow field within a low-speed fan stage operating with a continuous 60 deg inlet stagnation pressure distortion are presented. These results are used to describe the three-dimensional fluid mechanics governing the interaction between the fan and the distortion and to make a quantitative assessment of the impact on loss generation within the fan. A 5.3 percentage point reduction in stage total-to-total efficiency is observed as a result of the inlet distortion. The reduction in performance is shown to be dominated by increased loss generation in the rotor due to off-design incidence values at its leading edge, an effect that occurs throughout the annulus despite the localized nature of the inlet distortion. Increased loss in the stator row is also observed due to flow separations that are shown to be caused by whirl angle distortion at rotor exit. By addressing these losses, it should be possible to achieve improved efficiency in BLI fan systems.