The Miniature Xenon Ion (MiXI) thruster with the Axial Ring-Cusp Hybrid ‘MiXI(ARCH)’ discharge was developed and operated with beam extraction at 1 kV. The thruster achieved 59% cathode-free total discharge efficiency at 23.7 mA xenon beam current with filament cathodes and low temperature operation, corresponding to a discharge loss of 226 W/A and propellant utilization of 72%. Thruster efficiency was observed to increase with increasing flow rate and decrease with increasing temperature up to thermal steady state. At thermal steady state, the thruster anode reached ∼320 °C due to the thermal isolation of the thruster head. Reducing the discharge chamber aspect ratio from 0.5 to 0.4 increased thermal steady state efficiency from 46% to 57% but required slow ramping of beam voltage and was limited to stable operation to above 0.5 sccm discharge propellant flow. In contrast to the 3-ring cusp configuration, MiXI(3-Ring), the performance is generally higher but is not able to achieve lower thrust levels and requires more complex start-up for stable operation. An analytical single-cell model was developed and applied to investigate internal processes of the MiXI(ARCH) discharge. The model emulated the effect of increasing flow on performance, indicating that the dominant loss mechanism is plasma electron current to the anode, in contrast to the 3-Ring geometry, which is dominated by primary electron losses. This model also matched trends reported in previous works of strongly increasing electron temperature and primary density with propellant utilization. Through this effort, the MiXI thruster’s highest achievable total efficiency has been increased, and several mechanisms for further improved efficiency have been identified.