A new microwave generation mechanism involving a scalloping annular electron beam is discussed. The beam interacts with the axial electric field of a TM0n mode in a smooth circular waveguide through the axial free-electron laser interaction, in which the beam ripple period is synchronous with the phase slippage of the rf mode relative to the electron beam. In this paper, we analyze the ripple motion of the electron beam and derive the dispersion relation describing the exponential growth of the rf mode. We calculate the gain for a nominal design and as a function of beam current and ripple amplitude, and show that power gain on the order of 30 dB/m of interaction is achievable. We additionally demonstrate that, under the right conditions, the interaction is autoresonant. © 1997 American Institute of Physics.