In this paper, unsteady characteristics of a modified vaned-recessed casing treatment with 23.2% rotor blade tip axial chord exposure were studied numerically. The modifications to the traditional vaned-recessed casing treatments were composed of geometrical amendments to the casing treatment’s guide vanes and the top of the treated casing. The solid casing and the casing treatment configurations were simulated using the Unsteady Reynolds-Averaged Navier–Stokes equations (URANS), and the results were validated by experimental results. Firstly, standard deviation and frequency analysis were performed to find the sources of unsteadiness. Secondly, velocity components analysis, including velocity triangles, was presented instantaneously to clarify their effects on rotor tip flow fields as well as stall margin improvement. Thirdly, unsteady interactions between the rotor and casing treatment flow fields, including flow structure and pressure distributions, were discussed. In the end, flow streamline patterns, in addition to the physical mechanism of the vaned-recessed casing treatment, were also discussed. The results indicated that unsteadiness plays an important role in the flow mechanism and cannot be ignored. The unsteadiness increases as the mass flow is reduced toward the stall/surge condition. Moreover, the analysis of velocity components demonstrated that the casing treatment has distinct behavior at the last operating points before the onset of the stall for solid casing and casing treatment configurations in terms of axial velocity change.