A disk-loaded coupled cavity structure operating in the quasi-TM03 mode has been used here to develop a high electron efficiency, high output power terahertz radiation source, demonstrating that it is possible to concentrate the axial field energy along the source’s central axis within a large cavity. Compared with traditional extended interaction devices operating at the same frequency band, the operating mode of this present device provides a sizable beam tunnel capacity that can support efficient energy conversion between the electron beam and the high frequency field. The developed electron optical system is based on a cylindrical electron beam of 0.3 mm radius and is capable of producing a beam current of 0.65 A at a bias of 16.4 kV. Particle in cell simulations show that such new design approaches can achieve kilowatt-level output power at 0.22 THz with a high electron efficiency of 11.5%.