In this paper, a theoretical and experimental investigation on an innovative cycloidal speed reducer is presented. The typical cycloid drive has a planet wheel, the profile of which is the internal offset of an epitrochoid meshing with cylindrical rollers connected to the case. This reducer, on the contrary, has an external ring gear, the transverse profile of which is the external offset of an epitrochoid and engages with the planet wheel by means of cylindrical rollers. This paper investigates the structural characteristics and the kinematic principles of this type of reducer. A theoretical approach based on the theory of gearing (following Litvin’s approach) is developed and compared to a development of Blanche and Yang’s approach. Furthermore, a simplified procedure to calculate the force distribution on cycloid drive elements, its power losses, and theoretical mechanical efficiency is presented. The effects of design parameters on the values of forces are studied for an optimal design of this type of reducer. The theoretical model is tuned on the basis of the results of tests made on purpose. The mechanical efficiency dependency on speed and torque is described. The main aim of this work is to tune a theoretical model in order to predict the operating behavior of the cycloid drive and to improve its design procedure.