The simulation design and preliminary experiment on a 0.34 THz large-power overmoded surface wave oscillator are presented in this paper. For the slow wave structure (SWS) with large overmoded ratio (D/λ ≈ 6.8), a small signal theory is derived for appropriate dimensions of SWS and gap between electron beam and SWS, and makes the device oscillate near the π point of surface wave at TM01 mode. PIC (particle in cell) simulation results show that this SWO (small wave oscillation) can genetate the terahertz wave with frequency and output power of 0.34 THz and 22.8 MW, respectively. SWS with stainless steel is integrally and precisely fabricated by employing mirco-EDM technology, and the experimental setup is built based on a miniaturized pulse power driving source. Results of preliminary experiment and diagnostics show that a terahertz pulse is radiated at a frequency range of 0.319–0.349 THz, a power of no less than 250 kW, and a pulse duration of about 2 ns at beam voltage of about 420 kV and beam current of about 3.1 kA. Finally, the reason for discrepancy between the measured power and the simulation result is analyzed and discussed, laying the foundation for the performance improvement of terahertz surface wave oscillator.