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This paper presents the design, prototyping, and analysis of a novel modular transverse flux permanent-magnet disk generator. The disk-shaped structure simplifies the construction procedure by using laminated steel sheets. To reduce output harmonics, the excitation of the generator is done by circular flat shaped Nd-Fe-B permanent magnets. First, a typical low power generator is designed, and then partially optimized. The optimization objective is to find an inner radius which maximizes the power factor, the output power to mass ratio, and the efficiency. The generator equivalent circuit parameters are computed by three-dimensional finite-element analyses. The simulation results show that the power factor of the proposed structure is considerably greater than the power factor previously reported for other transverse flux permanent-magnet generator structures. To verify the simulation results, a prototype has been constructed and tested. The experimental results are in good agreement with simulation results.