A new type of damper combining eddy current damping with rack and gear, which can simultaneously export damping and inertial forces, is proposed. Eddy current damping with rack and gear is supposed to be installed between the building superstructure and foundation to mitigate the seismic response of the building. First, the concept of eddy current damping with rack and gear is introduced in detail and its apparent mass and equivalent damping coefficient are both theoretically investigated. Second, a prototype of eddy current damping with rack and gear is manufactured, and a series of tests on the prototype are carried out to verify its structural parameters. The experimental and theoretical results of the apparent mass of the prototype agree well with each other. The experimental result of the equivalent damping coefficient of the prototype is slightly lower than the numerical results obtained from COMSOL Multiphysics and its maximum relative differences are 11.3% and 13.6% for α = 0° and 45°, respectively. Third, detailed parametric studies on the damping force, including the effects of the thickness of the conductor plate, air gap, and number and location of permanent magnets, are conducted. The results show that the damping force keeps a linear relationship with velocity if it is lower than 0.15 m/s, and with the increase of the velocity, a strong nonlinear relationship between the damping force and the velocity is observed. The available maximum damping force can be increased by decreasing the thickness of the conductor plate and the air gap, increasing the number of permanent magnets. There is an optimal location about the permanent magnets for the available maximum damping force. In addition, the hysteretic curves of the eddy current damping with rack and gear obtained from the test indicate that the ability of energy dissipation is considerable.