Abstract: Pneumatic down-the-hole hammer, serving as rock-breaking tool, possesses appeal for directional drilling due to its high rate of penetration. However, corresponding experimental studies on existing hammers for directional drilling have rarely been reported, and a model for evaluating their output performance is absent. This study proposes a novel structure of self-rotating pneumatic hammer (NSH) with a built-in rotational mechanism, which converts partial impact energy of the piston to rotate the drill bit and, consequently, enables dual functions of impact and rotate drill bit. The energy is converted via a screw key-groove mechanism, and the wedge-shaped teeth mechanism ensures that the drill bit rotates clockwise during the piston moves downward. The computational fluid dynamics method is applied to simulate the dynamic response of airflow and piston during the operation of Φ127NSH. Meanwhile, a test bench is established to record data concerning chamber pressure and piston displacement, as well as recording its operational status and rock fragmentation during drilling into granite. The results showed that the maximum error between simulated and experimental data is 8.2%. The Φ127NSH successfully achieves dual impact and rotary drilling functions, and granite smoothly feeds and forms a continuous shear rock zone. In addition, the effects of torque load, engagement distance in rotation sleeves, and well deviation angle towards the performance of NSH were studied in detail. The designed Φ127NSH operates at an impact velocity of 3.98 m/s, impact frequency of 12.55 Hz, and rotational speed of 29.51 r/min under a mass-flow rate of 0.18 kg/s, torque load of 400 N·m, engagement distance of 40 mm, and well deviation angle of 0°. The torque load adversely affects the NSH output performance. Increasing the engagement distance improves impact performance while reducing rotational performance. The performance variation of the NSH is minimal when drilling directional wells with varying deviation angles.