This paper presents the design and experimental validation of an eddy current torque transfer clutch for use inside Automated Manual Transmissions (AMTs) to perform seamless gear upshifts. Electric vehicles (EVs) with a single-ratio gearbox may provide high levels of smoothness, but using a multi-speed gearbox provides significant benefits in terms of vehicle acceleration, top speed, powertrain cost, mass, and energy consumption. AMTs can provide smooth shifts without torque interruption when coupled to a normally-open torque bypass clutch. However, conventional dry friction clutches are not best suited for such torque bypass due to wear and controllability concerns, while wet clutches would decrease powertrain efficiency due to viscous losses. An eddy current clutch would be highly controllable, simple to manufacture, low-cost, robust, and do not wear compared to friction clutches. The potential of eddy current clutches is assessed from a representative case study consisting of a ∼190 Nm clutch for a seamless two-speed AMT. The clutch design is based upon Wouterse's model, which is further refined using a Finite Element Analysis (FEA) on the clutch magnetic circuit. A prototype clutch is built and installed inside an existing AMT. The measured clutch coupling torque agrees well with Wouterse's model results, with a maximum error of 6%. The AMT performed seamless gear upshifts on a test bench thanks to the eddy current clutch, which confirms their viability for torque bypass.