Deep brain stimulation (DBS) electrodes are designed to stimulate specific areas of the brain. The most widely used DBS electrode has a linear array of 4 cylindrical contacts that can be selectively turned on depending on the placement of the electrode and the specific area of the brain to be stimulated. The efficacy of DBS therapy can be improved by localizing the current delivery into specific populations of neurons and by increasing the power efficiency through a suitable choice of electrode geometrical characteristics. We investigated segmented electrode designs created by sectioning each cylindrical contact into multiple rings. Prototypes of these designs, made with different materials and larger dimensions than those of clinical DBS electrodes, were evaluated in vitro and in simulation. A finite element model was developed to study the effects of varying the electrode characteristics on the current density and field distributions in an idealized electrolytic medium and in vitro experiments were conducted to measure the electrode impedance. The current density over the electrode surface increased towards the edges of the electrode, and multiple edges increased the non-uniformity of the current density profile. The edge effects were more pronounced over the end segments than over the central segments. Segmented electrodes generated larger magnitudes of the second spatial difference of the extracellular potentials, and thus required lower stimulation intensities to achieve the same level of neuronal activation as solid electrodes. For a fixed electrode conductive area, increasing the number of segments (edges) decreased the impedance compared to a single solid electrode, because the average current density over the segments increased. Edge effects played a critical role in determining the current density distributions, neuronal excitation patterns, and impedance of cylindrical electrodes, and segmented electrodes provide a means to increase the efficiency of DBS.