The tip leakage flow (TLF) generated by the tip clearance has adverse effect on the performance of the impeller and increases pressure fluctuation. To suppress the effect of TLF on the instable flow in a semi-open centrifugal pump, the circumferential groove method is proposed in this paper. The effect of the circumferential groove on the internal flow and pressure fluctuation under the design condition is studied by combining numerical simulation with experiment. The results show that the head and efficiency were reduced by 1.1% and 1.0%, respectively. However, the circumferential groove provided a circumferential channel for leading edge overflow. The fluid in the groove formed a jet near the low-pressure region, which can effectively disperse the low-energy fluid of the blade inlet. The initial position and trajectory of the tip leakage vortex (TLV) move downstream, which decreases the relative flow angle and low-velocity region. The flow field in the blade tip region was improved remarkably. The low-frequency pressure fluctuation in the pressure surface and tip clearance of the blade inlet was suppressed by the circumferential groove, and pressure pulsation intensity decreased by 50% and 66%, respectively.