In this paper, an experimental study was carried out on the rotating instability in an axial compressor subjected to inlet steady paired swirl distortion. In order to deepen the understanding of the rotating stall mechanism under inlet steady paired swirl distortion, the dynamic-wall static pressure near the rotor tip was monitored to characterize the flow in the rotor tip region at different circumferential stations. In the experiment, the dynamic characteristics of the rotor tip flow field at a stable operating point and during the process from the stable point to complete stall were measured. The results indicated that for the compressor with a 2 mm rotor tip clearance, the inlet paired swirl distortion induced rotating instability (RI) near the stall point, causing the compressor to enter stall in advance. Compared with the RI intensity of the clean inlet, the distortion with a swirling blade stagger angle (αs) of ±20° increased the RI intensity up to 69.8%, while for αs equal to ±40°, the RI intensity increased at most by 135.8%. As the rotor tip clearance increased to 3 mm, the co-rotating swirl in the paired swirl distortion inhibited the appearance of RI, while the counter-rotating part aggravated the development of RI. At the beginning, the process of the compressor rotating stall involved the alternation of short-scale disturbance and long-scale disturbance. The co-rotating swirl weakened the perturbation propagated from the counter-rotating swirl sector. Once the inhibition was no longer present, the short-scale disturbance rapidly developed into a long-scale disturbance and then entered the rotating stall.