We report measurements on current‐voltage (I‐V) characteristics of externally shunted Josephson tunnel junctions where the external shunts have nonzero inductance. At low temperatures (T<6.6 K), we observe standardI‐Vcurves, but as temperature is increased above 6.6 K we observe an anomaly in theI‐Vcurves. We attribute this anomaly to the nonzero inductance in the shunt loop. Numerical simulations which properly take into account the effect of inductance show that the dynamics in the anomalous region of theI‐Vcurve are dominated by subharmonic relaxation oscillations. We use a load‐line analysis model to study the transition between the relaxation oscillations and the Josephson oscillations. The analysis is in good agreement with our data. Our analysis further predicts, and our data confirms, that in order for the relaxation oscillations to occur it is necessary to have &bgr;C=2&pgr;IcR2sC/&Fgr;0<(4/&pgr;)2, regardless of the value of the inductance. ©1995 American Institute of Physics.