Only10-16% of the fuel energy is used to drive the car-to overcome the resistance from road friction and air drag. One important loss is the dissipation of vibration energy by shock absorber of the vehicle suspension due to road irregularity, vehicle acceleration and deceleration. A prototype of regenerative shock absorber (RSA)was developed and its performance was studied.The prototype of RSA mainly consists of a gear transmission system, one way bearing and an electromagnetic generator.The RSA's damping coefficient, its capacity to absorb energy and its ability to regenerate electrical energy were measured for various input frequencies, amplitudes and electrical loads. A quarter car model which consists of the developed RSA,a mass anda spring with specific damping ratio of ζ =0.6 and ζ =0.8 was tested. The test was done using a quarter car suspension test rig to investigate the performance of suspension which uses RSA and the generated electrical energy from RSA. The results are reported and discussed in this article.