This paper employs grain-oriented electrical steel (GOES) in an axial-flux switched reluctance motor (AFSRM) to improve its torque characteristic, taking advantages of the material's excellent magnetic properties in the rolling direction. Based on the study on the parameter and switching characteristics of an AFSRM, GOES can be divided into pieces and arranged in the rotor and stator teeth so that the magnetic flux mainly travels along the rolling direction of the material. AFSRMs with different lamination shapes and deviation angles between the magnetic flux and rolling direction of the GOES have been studied to further improve the output performance; the maximum electromagnetic torque of the proposed design shows a 20.5% increase in comparison with that of the conventional nonoriented electrical steel motors under identical conditions. The rotor retaining ring is composed of epoxy resin lamination to constrain the rotor teeth modules. Thermal and stress analyses under fault conditions are analyzed to verify the reliability of the retaining ring. Furthermore, an AFSRM prototype is built and experiments are conducted to validate the calculated data.