Self-loosening of bolted joints can occur in a vibration environment, and it may induce bolt fatigue fracture with catastrophic consequences. It is essential to clarify the self-loosening mechanism, based on which novel anti-loosening thread structures can be developed. In this paper, we propose the concept of radial slippage propagation and provide new insights into the self-loosening process. The new theory states that the slippage along the radial direction of the thread surface induces more slippage areas (slippage propagation), and self-loosening occurs due to the dynamic evolution and propagation of contact states on the thread and bearing surfaces with an increase in the number of vibration cycles. Finite element analysis (FEA) was used to validate the propagation process of slippage areas on the thread surface. A novel bolted joint with step thread engagement was developed, which could prevent the occurrence of relative motion of the external and internal threads in the radial direction and thus block slippage propagation. A three-dimensional (3D) finite element model (FEM) of the novel thread structure was established, and a test specimen was manufactured using two special tools. FEA and experiments validated its superior anti-loosening and anti-fatigue performances, and the convenience of installation and removal. Experimental validation of the radial slippage propagation theory and the performance optimisation of the step-thread structure should be performed in the future.