To overcome the serious thermal recession problem that has been associated with the braking torque of conventional eddy current brakes, and to conserve energy, this paper has proposed a novel self-excited eddy current retarder (S-ECR). The design includes a stator with an internally cooled channel, a rotor with double salient poles, and a built-in generator. The electromagnetic field analysis and the performance analysis of the S-ECR were carried out using the finite-element method. The S-ECR performance was tested at a test bench. The test results showed that the calculated braking torque and the generator performance were in reasonable agreement with the measured results. The braking performance did not obviously diminish during the continuous braking stage. When the speed was 1500 r/min and the exciting current was 30 A, the braking torque could reach 1600 N.m.