Influence of the initial energy modulation caused by the self-potential depression on the premodulated electron-beam propagation through a drift tube is investigated. The potential depression &kgr; can significantly vary because of the initial current modulation. Thus, beam’s kinetic energy at the injection varies accordingly. A self-consistent nonlinear theory of current modulation of the premodulated electron beam is developed. It is shown that the initial energy modulation caused by the self-potential depression at injection plays a significant role in the current modulation for long range propagation. It is also found from a small signal theory that reduction of the beam’s kinetic energy due to its potential depression accelerates debunching process of the initial current modulation. Although the initial current modulation is debunched quickly for high current beam, amplitude of the current modulation never becomes zero because of the initial energy modulation. ©1997 American Institute of Physics.