Measurements are processed on a centrifugal pump model, which works with air and performs with the vane-island type diffuser of a real hydraulic pump, under five flow rates to investigate the internal flow characteristics and their influence on overall pump performance. The mean flow characteristics inside the diffuser are determined by using a miniature three-hole probe connected to an online data acquisition system. The flow structure at the inlet section of the diffuser is analyzed in detail, with a focus on the local pressure loss inside the vaneless gap and incidence angle distributions along the hub-to-shroud direction of the diffuser. Some existing calculations, including leakage effects, are used to evaluate the pressure recovery downstream of the impeller. Furthermore, particle image velocimetry (PIV) measurement results are obtained to help analyze the flow characteristics inside the vane-island diffuser. Each PIV measuring plane is related to one particular diffuser blade-to-blade channel and is analyzed by using the time-averaged method according to seven different relative positions of the impeller. Measurement results show that main loss is produced inside the vaneless part of the diffuser at low flow rates, which might have been caused by the strong rotor–stator interaction. When the impeller flow rate is greater than the diffuser design flow rate, a large fluctuating separated region occurs after the throat of the diffuser on the pressure side. Mean loss originates from the unsteady pressure downstream of the diffuser throat. For better characterization of the separations observed in previous experimental studies, complementary unsteady static pressure measurement campaigns have been conducted on the diffuser blade wall. The unsteadiness revealed by these measurements, as well as theirs effects on the diffuser performance, was then studied.