This thesis describes the development of a test facility equipped with Langmuir probe and Retarding Potential Analyzer diagnostics for helicon thruster research. A helicon thruster using permanent magnets was also designed and tested. The helicon has several advantages, but the main disadvantage is the use of electromagnets to generate the required magnetic field, requiring a high power draw. The choice of using permanent magnets is to reduce the size, cost and power required to generate high specific impulse thrust. A prototype has been designed, analyzed and tested using Argon with demonstrated specific impulse of 1400 seconds. Analysis of the variation of beam power and ion temperature in the exhaust plume with variation of input power and vacuum pressure are presented. Preliminary tests were conducted using water as a propellant. Measurement of the ion energy distribution function shows a number of peaks indicating the presence of dissociation products.