To study the impact of rotating inlet distortion on stall mechanism of an axial compressor, the full-annulus unsteady simulation results are analysed using dynamic mode decomposition (DMD). Firstly, the frequency and energy ratio of each mode at near stall condition for the compressor with uniform inflow are obtained. A dominating frequency band 0.3–0.6 BPF regarded as the characteristic frequency of unsteady tip leakage flow is observed. The distribution of eigenvalues further confirms that there are a few critical unstable modes in the flow field. With further throttling, four large-scale disturbance structures are captured by the second-order mode, whose frequency is twice as the rotor frequency. The circumferential propagation velocity of the stall cell is thus deduced to be about 50% of the rotor speed. Further, when the compressor is subjected to rotating inlet distortion, the change of stalling process is related to the relative position of distortion plate and stall cell according to the DMD mode frequency and shape. The addition of rotating distortion does not change the stall type of the compressor, but the unstable modes indicate that the number and shape of the stall cells have been varied.