In order to improve the stability margin of the fan, the FBCDZ-No20 contra-rotating fan is selected as the research object, and the influence of the coupling effect of the axial position and the depth of the circumferential groove on the stability margin of the fan was explored. Numerical simulation shows that the circumferential groove casing treatment in the front stage can realize the effective stability margin improvement of the fan, in which the 30mm circumferential grooves located at 25% axial chord length can can make the fan obtain considerable stability margin improvement. However, the implementation of circumferential groove reduces the peak efficiency of the fan where the circumferential groove located at 25% of the axial chord length leads to a larger loss of peak efficiency of the fan, and the loss of peak efficiency also increases with the increase of the groove depth. Compared with the groove depth, the axial position of the circumferential groove has a more significant effect on the stability margin of the fan, shallow circumferential grooves in favorable axial positions can compensate for the lack of shallow grooves, whereas deeper circumferential grooves in unfavorable positions cannot reflect the advantages of the deep groove.