By analyzing the shortcomings of various types of cycloid drive, a kind of new cycloid drive that named as output-pin-wheel cycloid drive is innovated. The structure of reducer and the structural dimensions of specific components are designed by analyzing its working principle. In order to validating the correctness of drive model and assembly relations of parts, a three-dimensional solid modeling and virtual prototyping are built. Dynamic simulation analysis of virtual prototyping is done in the no-load and full load conditions, which provides the theory basis for manufacture and optimization of the reducer.