Active balancing actuators are essential components of intelligent machine tool spindles to automatically reduce the unbalance vibration and promote machining accuracy and efficiency. In this study, a novel electromagnetic-ring actuator is introduced, which can be integrated into the hollow rotor of the spindle and compensate the initial mass imbalance through step rotation of two counterweight discs driven by the magnetic field. The working principle of the actuator is described in detail and its performance is analyzed, including balancing ability, balancing accuracy and self-lock capacity. To control the normal operation of the actuator, a phase detection and control program was developed. Finally, to verify the effectiveness of the novel actuator, function experiments and active balancing experiments were carried out. The experimental results show that the novel actuator could reduce the unbalance vibration of the machine tool spindle by 87.5% at 3600 rpm.