Abstract: Eddy current retarder is a kind of auxiliary braking device based on eddy current brake. To solve its serious thermal recession problem of braking torque, an electromagnetic liquid cooling retarder with embedded rotor was proposed, based on transverse electromagnetic flux. The characteristics of its structure and working principle were studied. According to regularity of eddy current distribution, the calculation formula of the braking torque was deduced by using the electromagnetic principle. The relationship between the braking torque, size of rotor, material of stator, excited current and rotor speed were obtained. Meanwhile the correctness of the calculation formula was verified by experiments. At last, the test of no-load loss torque and the thermal decay of the electromagnetic liquid cooling retarder were conducted by test bench. The test results show that the structure of the electromagnetic liquid cooling retarder is reasonable, and it has high power density and small heat fading with continuous braking.