In this study, a novel design scheme for a power skiving cutter and its grinding wheel profile is proposed based on the geometry of a target circular spline (CS) workpiece. First, a generalized mathematical model of a target CS profile is expressed using a B-spline curve. Subsequently, the nominal cutting edge of the skiving cutter for generating an error-free CS is derived based on power skiving kinematics. In addition, the axial profile of the grinding wheel for generating the derived nominal cutting edge is resolved based on lengthwise-reciprocating grinding kinematics. The proposed design process for the skiving cutter and its grinding wheel is illustrated using numerical examples. The profile accuracy of the CS yielded by the designed nominal cutting edge is computed to validate the proposed design processes. Moreover, errors of the skived CS profile resulting from various resharpening depths by grinding back the stepped rake face of the skiving cutter are investigated. Finally, to effectively extend the tool life of the skiving cutter, a compensation rolling angle is introduced into the CS skiving process.