Flow instability in a vaned diffuser with an even number of blades was examined experimentally and analytically. In the experiments, an alternate blade stall, an asymmetric stall, and two types of rotating stalls (backward/forward rotating stall) were observed depending on the impeller/diffuser clearance. For narrow clearance with strong impeller/diffuser interaction, the alternate blade stall and backward rotating stall mainly occurred. With increasing the clearance, the forward rotating stall also occurred, and the onset of rotating stall shifted toward the higher flow rate corresponding to the pressure performance in the vaned diffuser. Simple 2D stability analysis showed that the impeller/diffuser clearance affects the speed and direction of the stall propagation, and the slope of the diffuser pressure performance vs. flow rate curve affects fundamentally the onset of the flow instability within the diffuser.