The design procedure, fabrication and measurement of a Class-E power amplifier with excellent second- and third-harmonic suppression levels are presented. A simplified design technique offering compact physical layout is proposed. With a 1.2 mm gate-width GaAs MESFET as a switching device, the amplifier is capable of delivering 19.2 dBm output power at 2.41 GHz, achieves peak PAE of 60% and drain efficiency of 69%, and exhibits 9 dB power gain when operated from a 3 V DC supply voltage. When compared to the classical Class-E two-harmonic termination amplifier, the Class-E amplifier employing three-harmonic terminations has more than 10% higher drain efficiency and 23 dB better third-harmonic suppression level. Experimental results are presented and good agreement with simulation is obtained. Further, to verify the practical implementation in communication systems, the Bluetooth-standard GFSK modulated signal is applied to both two- and three-harmonic amplifiers. The measured RMS FSK deviation error and RMS magnitude error were, for the three-harmonic case, 1.01 kHz and 0.122%, respectively, and, for the two-harmonic case, 1.09 kHz and 0.133%. © 2007 The Institution of Engineering and Technology.