Compulsators have been considered as appropriate pulsed power supplies for electromagnetic railguns. In order to ensure a high projectile peak to mean acceleration ratio, it is desirable to provide a flat-topped pulse for the railgun. This paper analyzes a two-axis compensated compulsator, which is a refined selective passive compulsator having an orthogonal displacement between compensating winding and field winding. During the discharge process, the quadrature-axis compensation is provided by the compensating winding, when direct-axis compensation provided by the field winding. Compare to traditional selective passive configuration, this arrangement is able to provide another degree of freedom to compensate the armature reaction, thus output a current waveform with more flexibility. In this paper, the self-excitation and discharge process of a two-axis compensated air-core compulsator is simulated based on a finite-element model. Analysis of current waveform sensitivity to compulsator design parameters is also carried out, as well as the regulation strategy to generate a flat-topped pulse. The research process mentioned in this paper could help to optimize design of compulsators in future applications.