Distributed wall loss is proposed to enhance the stability and tunability of a W-band TE01 gyrotron backward-wave oscillator (gyro-BWO). Simulation results reveal that loss effectively suppresses the unwanted transverse modes as well as the high-order axial modes (HOAMs) without degrading the performance of a gyro-BWO that operates at the fundamental axial mode. Linear and nonlinear codes are used to calculate the interaction properties. The effects of the distributed loss on the starting currents of all of the modes of interest are discussed in depth. The interacting structure is optimized for stability. The calculated peak output power is 102 kW, corresponding to an efficiency of 20%. The 3 dB tuning bandwidth is 1.8 GHz, centered at 94.0 GHz when using 5 A and 100 kV electron beam. (C) 2008 American Institute of Physics.