This article investigates a drag-type vertical-axis wind turbine that is targeted for small-scale wind energy system applications. Based on aerodynamics models, the three-dimensional simulation studies have been carried out to obtain the force distributions along blades and eventually the torque and power coefficients for different vertical-axis wind turbine configurations. An optimal vertical-axis wind turbine configuration is chosen based on the comparative analysis, and a 2 kW prototype system has been implemented based on the design. The effectiveness of the three-dimensional models and simulation results has been verified by the measured data from the actual vertical-axis wind turbine system. The wake impacts to the vertical-axis wind turbine caused by nearby objects are also analyzed. The simulation results and the actual operation experiences show that the proposed system has the characteristics of low cut-in speed, high power density, and robustness to adjacent objects (such as buildings and other wind turbines), which make it suitable for smallscale wind energy systems in populated areas including urban environment.