The transient process of the rotating stall development in a centrifugal compressor with a vaned diffuser was investigated by experimental and numerical analyses. Previous studies show that a diffuser stall triggers a stage stall, which rotates through rotor and stator passages. The vortex evolution at the diffuser throat represents the key factor in diffuser stall development. The developed diffuser stall cell blocked the impeller exit, causing an impeller passage stall. This paper focused on two aspects regarding the transient process of the diffuser stall development. The first aspect is the process by which the vortex at the diffuser throat near the hub side, develops in the circumferential direction. Secondly, we investigated the mechanism of the diffuser stall expansion into impeller passages. The transient analysis of the diffuser stall development was conducted experimentally and numerically by closing the throttle valve abruptly. The hub side blockage was initiated near the cutoff by the strong adverse pressure gradient in the diffuser throat area. Therefore, the key factor in the diffuser stall evolution was the development of a throat blockage near the cutoff, obtained from both experimental and computational fluid dynamics results. Furthermore, the transient stall cell blocked the impeller passages and induced a hub side blockage at the throat of the impeller passages and the impeller leading edge separation. The pressure surface separation of the impeller at the trailing edge had a great impact on the development of the stall cell within impeller passages.