The theoretical analysis and simulation on the permanent magnet guidance system of the E-type waveguide oscillator are developed. Firstly, the theoretical analysis of the modified paraxial ray equation, the minimum magnetic field under relativistic conditions and the transmission conditions of an intense relativistic electron beam in ideal reverse guidance magnetic field are presented. Then the reverse permanent magnet guidance system is designed according to the structure characteristics of the high-frequency interaction zone of the C-band E-type waveguide oscillator, and the expression of each magnetic field component is given. The reverse permanent magnet guidance system produces reverse guidance magnetic field by combining axial and radial magnetized cylindrical permanent magnets, and the total weight of the magnets is about 2.5 kg. The transmission characteristics of the intense relativistic electron beam in the guiding magnetic field are shown. The annular intense relativistic electron beam is produced by an explosive emission cathode. The results show that the designed reverse permanent magnet guidance system can guide the annular electron beam, with voltage of 400 kV, current of 580 A, to pass through the drift tube with a radius of 6mm. In addition, the E-type waveguide oscillator can stably generate 4.8 GHz microwave with power of 112.5 MW and efficiency of 48.49%, and the technical possibility of the reverse permanent magnet guidance system applied to the E-type waveguide oscillator is determined.