The improvement of centrifugal compressor performance and the control of the radial forces acting on the impeller due to the circumferential variation of the static pressure caused by the volute require a good understanding of the flow mechanisms and an accurate prediction of the flow pattern inside the volute. A three-dimensional volute calculation method has been developed for this purpose. The volute is discretized by means of hexahedral elements. A cell vertex finite volume approach is used in combination with a time-marching procedure. The numerical procedure makes use of a central space discretization and a four-step Runge-Kutta time-stepping scheme. The artificial dissipation used in the solver is based on the fourth-order differences of the conservative variables. Implicit residual smoothing improves the convergence rate. The loss model implemented in the code accounts for the losses due to internal shear and friction losses on the walls. A comparison of the calculated and measured results inside a volute with elliptical cross section reveals that the modified Euler solver accurately predicts the velocity and pressure distribution inside and upstream of the volute.