Wave-based electricity generation is attracting increasing attention to address the long-term power supply problem of offshore marine observation buoys. To achieve continuous and real-time measuring of the marine environment, reliable wave energy harvesting technologies with high efficiency are urgently needed. For that purpose, a new marine observation buoy with a built-in wave-excited energy harvester was proposed in this study. A small-scale proof-of-concept prototype was designed, fabricated, and tested in a wave flume. A fully coupled mathematical model of the system with a mooring system was presented, and simulation results were validated by experimental data. The dynamics and the power performance of this novel concept under regular waves were investigated, considering the influence of the mooring system and electric load. Experimental results from a wave flume indicated that a time-averaged electric power of 160 mW was obtained under a regular wave with a height of 6.0 cm and a period of 1.0 s when the electric load for the wave-powered observation buoy is 310 Ω, and corresponding wave-to-wire efficiency is 14.3%. Numerical simulations and physical experiments have solidly demonstrated the feasibility of this novel wave-powered marine observation buoy.