It is quite a challenge to design low power Hall thrusters with a long lifetime and high efficiency because of the large surface area to volume ratio and physical limits to the magnetic circuit miniaturization. As a potential solution to this problem, we experimentally investigated the external discharge plasma thruster (XPT). The XPT produces and sustains a plasma discharge completely in the open space outside of the thruster structure through a magnetic mirror configuration. It eliminates the very fundamental component of Hall thrusters, discharge channel side walls, and its magnetic circuit consists solely of a pair of hollow cylindrical permanent magnets. Thrust, low frequency discharge current oscillation, ion beam current, and plasma property measurements were conducted to characterize the manufactured prototype thruster for the proof of concept. The thrust performance, propellant ionization, and thruster erosion were discussed. Thrust generated by the XPT was on par with conventional Hall thrusters [stationary plasma thruster (SPT) or thruster with anode layer] at the same power level (∼11 mN at 250 W with 25% anode efficiency without any optimization), and discharge current had SPT-level stability (Δ < 0.2). Faraday probe measurements revealed that ion beams are finely collimated, and plumes have Gaussian distributions. Mass utilization efficiencies, beam utilization efficiencies, and plume divergence efficiencies ranged from 28 to 62%, 78 to 99%, and 40 to 48%, respectively. Electron densities and electron temperatures were found to reach 4 × 1018 m−3 (∂ne/ne = ±52%) and 15 eV (∂Te/Te = ±10%–30%), respectively, at 10 mm axial distance from the anode centerline. An ionization mean free path analysis revealed that electron density in the ionization region is substantially higher than the conventional Hall thrusters, which explain why the XPT is as efficient as conventional ones even without a physical ionization chamber. Our findings propose an alternative approach for low power Hall thruster design and provide a successful proof of concept experiment of the XPT.