Capacitively coupled power transfer (CCPT) has been proposed as an alternative contactless/wireless power transfer solution. Unlike inductively coupled power transfer (ICPT), CCPT transfers power via electric field coupling, which is usually modeled as coupling capacitance. As the coupling capacitance of a CCPT system is normally very small due to practical constraints, its impedance needs to be compensated to increase the power transfer capability of the system. In this paper, a new resonant compensation method using an additional inductor and capacitor is proposed to improve the performance of CCPT system. A state space model of the system is established to analyze the characteristics of the proposed system based on a class E converter, and a practical prototype is built and tested which demonstrates that the new compensation method increases the output power transfer capability and serves as a band pass filter for reducing the switching harmonics propagation from the power converter to the load.