Compared to the traditional solid fuel pin, annular fuel with internal as well as external coolant flow increases the cooling surface by ~50%, which allows a higher core power density. However, operating at high power density introduces challenges in the core physics design of burnable poison to suit the desired fuel cycle length. In this paper, both the fuel cycle length and the number of reload fresh fuel assemblies are assumed to remain the same as current industry practice (18-month cycle and three-batch fuel management), which in turn requires >5 wt% fuel enrichment for the 150% power core. Alternative fuel cycles are discussed. Pressurized water reactor cores with annular fuel are designed using the state-of-the-art Studsvik Scandpower core modeling package including CASMO-4, TABLES-3, and SIMULATE-3. Two power levels are considered for the core design based on annular fuel: 100 and 150% of the rated power. The reactivity feedback effects of the annular fuel are shown to be comparable to those of solid fuel. The 150% power core with annular fuel shows considerable resemblance to traditional high-energy cores.