Annular thermoelectric generators (ATEG) are increasingly attracting attention and are pivotal in thermal energy recovery due to their unique characteristics, which can be perfectly adapted to cylindrical heat sources. Considering the efficient thermal management and power generation of thermoelectric generator (TEG), phase change material (PCM) can be integrated with the cold side of TEG as a favourable cooling medium to meet its functional requirements. However, previous studies have focused on the intrinsic connection between flat-plat TEG and PCM, while the impact of PCM on ATEG has not been systematically explored. In the present study, an annular thermoelectric generator with PCM (ATEG-PCM) under a pulsed heat source is proposed, and its dynamic characteristics and energy distribution are evaluated. The effects of PCM parameters such as height, latent heat and melting temperature are comprehensively explored from multi-index, including PCM temperature, liquid fraction, temperature difference, output power, energy and exergy efficiencies. Furthermore, a comparative investigation of ATEG-PCM, PCM-ATEG where PCM is applied on the hot side, and ATEG without PCM is further carried out to clarify the coupled mechanism of PCM on thermal management and power generation enhancement of ATEG. The results indicate that the energy efficiency of ATEG-PCM has saturated at PCM height of 10 mm to 12 mm, while the exergy efficiency merely slightly increases. Especially, the PCM melting temperature merely affects the time at which PCM initiates to change from solid state to liquid state, without affecting the total energy efficiency of ATEG-PCM. Furthermore, the comparison analysis determines that ATEG-PCM deserves more attention, judging by thermal management and power generation. This work not only contributes to the understanding of the coupling mechanisms between PCM and ATEG but also provides a research direction for energy recovery in PCM based ATEG hybrid system.