Experiments in a refractive index-matched axial turbomachine facility show that semicircular skewed axial casing grooves (ACGs) reduce the stall flowrate by 40% but cause a 2.4% decrease in the maximum efficiency. Aiming to elucidate mechanism that might cause the reduced efficiency, stereo-PIV measurements examine the impact of the ACGs on the flow structure and turbulence in the tip region near the best efficiency point (BEP), and compare them to those occurring without grooves and at low flowrates. Results show that the periodic inflow into the groove peaks when the rotor blade pressure side (PS) overlaps with the downstream end of the groove, but diminishes when this end faces the suction side (SS). Entrainment of the PS boundary layer and its vorticity generates a vortical loop at the entrance to the groove, and a “discontinuity” in the tip leakage vortex (TLV) trajectory. During exposure to the SS, the backward tip leakage flow separates at the entrance to the groove, generating a counter-rotating circumferential “corner vortex,” which the TLV entrains into the passage at high flowrates. Interactions among these structures enlarge the TLV and create a broad area with secondary flows and elevated turbulence near the groove’s downstream corner. A growing shear layer with weaker turbulence also originates from the upstream corner. The groove also increases the flow angle upstream of the blade tip and varies it periodically. Accordingly, the circulation shed from the blade tip and strength of leakage flow increase near the blade leading edge (LE).