This article deals with application of grooved type casing treatment for suppression of spike stall in an isolated axial compressor rotor blade row. The continuous grooved casing treatment covering the whole compressor circumference is of 1.8 mm in depth and located between 90% and 108% chord of the blade tip as measured from leading edge. The method of investigation is based on time-accurate three-dimensional full annulus numerical simulations for cases with and without casing treatment. Discretization of the Navier-Stokes equations has been carried out based on an upwind second-order scheme and k-x-SST (Shear Stress Transport) turbulence modeling has been used for estimation of eddy viscosity. Time-dependent flow structure results for the smooth casing reveal that there are two criteria for spike stall inception known as leading edge spillage and trailing edge backflow, which occur at specific mass flow rates in near-stall conditions. In this case, two dominant stall cells of different sizes could be observed. The larger one is caused by the spike stall covering roughly two blade passages in the circumferential direction and about 25% span in the radial direction. Spike stall disturbances are accompanied by lower frequencies and higher amplitudes of the pressure signals. Casing treatment causes flow blockages to reduce due to alleviation of backflow regions, which in turn reduces the total pressure loss and increases the axial velocity in the blade tip gap region, as well as tip leakage flow fluctuation at higher frequencies and lower amplitudes. Eventually, it can be concluded that the casing treatment of the stepped tip gap type could increase the stall margin of the compressor. This fact is basically due to retarding the movement of the interface region between incoming and tip leakage flows towards the rotor leading edge plane and suppressing the reversed flow around the blade trailing edge.