Abstract: As we all know, there are a series of problems in the current retarder, such as, the high price and complicated construction of traditional hydraulic retarder, heat recession of the brake of eddy current retarder and the special installation site of trailers' retarder. To resolve these problems, a liquid cooled self-excited axle retarder was proposed based on the knowledge of electromagnetic. First, the electromagnetic knowledge was used to deduce the air-gap magnetic flux density and braking torque by analyzing the feature of construction and working principle. A model of the braking system and electrical power generating system was set up to analyze the magnetic circuit. Second, a 3D model of a 2 000 N·m axle retarder was designed, and the electromagnetic field distribution, braking torque and power generation characteristics were analyzed by using finite element method. From this analysis, the relevant factors that affected the braking torque and power generation performance were derived. Finally, a bench test of the retarder prototype was preformed to test its brake characteristics and power generation characteristics. The test result shows that the error between the test result and the theoretical calculation is within 6%, and at a speed of 1 000 r/min, the braking torque reaches 2 000 N·m, after 20 minutes, the braking torque is 1 580 N·m, with a decrease of 20.8%, meeting the requirements of heavy vehicles. At a speed of 1 000 r/min, the generator load current reaches 90 A, and the above conclusions prove that the self-excited axle retarder design can meet the braking requirements and power supply requirements.