Energy storage systems are being more important to compensate irregularities of renewable energy sources and yields more profitable to invest. Compressed air energy storage (CAES) systems provide sufficient of system usability, then large scale plants are found around the world. The compression process is the most critical part of these systems and different designs must be developed to improve efficiency such as liquid piston. In this study, a liquid piston is analyzed with CFD tools to look into the effect of piston speed, compression ratio and cylinder geometry on compression efficiency and required work. It is found that, increasing piston speeds do not affect the piston work but efficiency decreases. Piston work remains constant at higher than 0.05 m/s piston speeds but the efficiency decreases from 90.9 % to 74.6 %. Using variable piston speeds has not a significant improvement on the system performance. It is seen that, the effect of compression ratio is increasing with high piston speeds. The required power, when the compression ratio is 80, is 2.39 times greater than the power when the compression ratio is 5 at 0.01 m/s piston speed and 2.87 times greater at 0.15 m/s. Cylinder geometry is also very important because, efficiency, power and work alter by L/D, D and cylinder volume respectively.