It is known that cavitating flow characteristics and instabilities in inducers can greatly impact the safety and stability of a liquid rocket. In this paper, step casing optimization design (Model OE and Model AE) was carried out for two three-bladed inducers with an equal (Model O) and a varying pitch (Model A), respectively. The unsteady cavitation flow field and accompanied instabilities were studied via numerical simulations. Reductions of the cavity size and fluctuation were observed in cases with a step casing. A significant difference in cavity structures was seen as well. Referring to the pressure distributions on the blades and details of the flow field, the mechanism of cavitation suppression was revealed. This work provides a feasible and convenient method in engineering practice for optimizing the characteristic of the cavitating flow field and instabilities for the inducer.