In this paper hydrodynamic lubrication analysis is carried out to investigate the effects of groove location on the lubrication performance of a piston and cylinder system in a linear compressor. The rectangle shaped grooves having a constant groove depth and width are applied on the lubrication area of the piston. The Universal Reynolds equation is used to calculate the oil film pressure, and the Elrod algorithm with the finite different method is used to solve the governing equation. The JFO boundary condition is applied to predict cavitation regions. Transient analysis for different locations of the grooves on the piston is carried out using the typical operating condition of the linear compressor in order to estimate the variations of frictional power losses and minimum film thicknesses. When the grooves are applied on the lubrication area, both the frictional power loss and the minimum film thickness decrease. The frictional power loss can be reduced effectively, while maintaining a minimum film thickness to enable the piston operation without direct contact with the cylinder surface, by means of choosing a proper location of the grooves. The optimum location of the grooves to improve a lubrication performance depends on the operation condition or the system requirements specification.