This paper presents the effect of manufacturing tolerance on performance and stability boundaries of a transonic fan using a Reynolds-averaged Navier–Stokes simulation. The effects of tip gap and stagger angle variations were analyzed through a series of single passage and double passage simulation; based on which an optimal arrangement was proposed for random tip gap and random stagger angle variation for a whole annulus rotor. All simulations were carried out using NASA rotor 67 as a test case and AU3D as an in-house computational fluid dynamics solver. Results illustrate that the stagger angle variation mainly affects efficiency and its circumferential variation must be as smooth as possible. Furthermore, the tip gap variation affects the stability boundary as well as performance and its optimal configuration mandates a zigzag arrangement of blades around the annulus, i.e., larger tip gap between two smaller ones.