Diffusers are one of the most important factors determining the centrifugal compressor performance. The present work is aimed at providing a detailed understanding of the underlying flow and loss mechanisms in three different diffusers in a compact centrifugal compressor stage. Experimental and computational studies were conducted for various diffuser configurations, e.g. two pipe diffusers and one wedge diffuser, while keeping the throat in all the three geometries. It was found that both the pipe diffuser configurations had better aerodynamic performance than the original wedge diffuser. Furthermore, the pipe diffuser with a fishtail arrangement exhibited greater performance improvement, but had more distortion outflow than the wedge diffuser and the radial pipe diffuser because of the strong jet and wake structure caused by the fishtail turn. Nevertheless, the fishtail configuration has a smaller discharge swirl angle, which would have a positive impact on the performance of the combustor. As a result, the fishtail pipe diffuser configuration was recommended in compact centrifugal compressors.