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The cylindrical Hall thruster (CHT) is an attractive approach to achieve a long lifetime thruster operation especially in low power space applications. Because of the larger volume-to-surface ratio than conventional coaxial Hall thrusters, the cylindrical Hall thrusters are characterized by a reduced heating of the thruster parts and potential lower erosion. Existing CHTs can feature a short coaxial channel in order to sustain a high ionization in the thruster discharge. A 5.6 cm diameter cylindrical Hall thruster was developed and operated with and without a short coaxial region of the thruster channel, in the power range of 70–300 W. It is shown that the CHT without coaxial region can operate stable and achieve higher thrust efficiency, 22%–32% more than that with a coaxial region. Plasma probe measurements inside the thruster channel and ion energy measurements in the plasma plume suggest that the ionization/acceleration region in the CHT is located near the anode region where a radial magnetic field is stronger.