A novel design of an air-coupled capacitive micromachined ultrasonic transducer (CMUT) with annular cell geometry (annular CMUT) is proposed. Finite element analysis shows that an annular cell has a ratio of average-to-maximum displacement (RAMD) of 0.52–0.58 which is 58–76% higher than that of a conventional circular cell. The increased RAMD leads to a larger volume displacement which results in a 48.4% improved transmit sensitivity and 127.3% improved power intensity. Single-cell annular CMUTs were fabricated with 20-μm silicon plates on 13.7-μm deep and 1.35-mm wide annular cavities using the wafer bonding technique. The measured RAMD of the fabricated CMUTs is 0.54. The resonance frequency was measured to be 94.5 kHz at 170-V DC bias. The transmit sensitivity was measured to be 33.83 Pa/V and 25.85 Pa/V when the CMUT was excited by a continuous wave and a 20-cycle burst, respectively. The receive sensitivity at 170-V DC bias was measured to be 7.7 mV/Pa for a 20-cycle burst, and 15.0 mV/Pa for a continuous incident wave. The proposed annular CMUT design demonstrates a significant improvement in transmit efficiency, which is an important parameter for air-coupled ultrasonic transducers.