This paper deals with an analysis of the dynamic behavior of compensated hydrostatic circular step thrust bearings taking into account fluid inertia and recess volume fluid compressibility effects. The Reynolds equation for fluid film and the recess flow continuity equations are linearized using perturbation methods. Results in terms of dimensionless load capacity, oil flow rate, stiffness, and damping are presented for capillary and orifice compensated bearings. Results show a marked influence of fluid inertia and recess volume fluid compressibility on the performance of the bearing.