A small rotating detonation engine (RDE) model and the corresponding experimental setup were constructed for the experimental investigation of the detonation propagation characteristics and thrust performance of a circular RDE. Experiments were conducted at a range of 0.3–2.5 equivalence ratio with a total mass flow rate of less than 180.0 g/s using a C2H4/O2 mixture. Irregularly unstable detonative combustion occurs immediately after the detonation initiation, which includes initiation, propagation, decaying, and the merging of detonation waves. Following this, periodically unsteady detonative combustion occurs in the circular channel, resulting in the stable operation of the RDE. During stable operation, two detonation waves are predominant, rotating along the wall at a speed lower than the Chapman–Jouguet (CJ) detonation speed. The characteristic velocity efficiency is approximately 73% on average. The low characteristic velocity efficiency is presumed to be caused by the unoptimized combustion channel and the poor mixing efficiency owing to the two-dimensional injector configuration. The effect of the RDE component design and the RDE flow field characteristics need to be further investigated for improving the performance of the RDE.