This paper presents an innovative conceptual design for small modular reactors, the reduced-moderation small modular reactor (RMSMR), for the sustainable use of nuclear resources. The concept is established by a modification of the well-understood pressurized water reactor technology. A reduced-moderation lattice and heavy-water coolant are used to yield an epithermal-to-fast neutron spectrum, which is beneficial for attaining a large conversion ratio and reducing the burnup reactivity swing throughout the core lifetime. Two-dimensional pin cell and three-dimensional core burnup calculations are performed to systematically analyze the neutronics influences of important parameters, such as the coolant type, moderator-to-fuel ratio, and fuel type. The RMSMR adopts a three-zone uranium-thorium dioxide fuel configuration to flatten the power distribution and ensure a negative void coefficient. The radial and axial blanket regions are found to enhance the breeding effect. The proposed RMSMR can sustain power generation of 100 MWe for 7 years without refueling and achieve a conversion ratio of 0.85 at the end of the cycle. Numerical simulations indicate that the proposed concept has satisfactory shutdown margins and reactivity coefficients and conservative thermal-hydraulic safety. The RMSMR may be a promising candidate to fill the gap between light-water reactors and fast breeder reactors.