Huang, Z. Kan, K. Marcus, G. Zhang, Z. JACoW Geneva, Switzerland We propose a method based on the slice energy-spread modulation to generate strong subpicosecond density bunching in high-intensity relativistic electron beams.* A laser pulse with periodic intensity envelope is used to modulate the slice energy spread of the electron beam, which can then be converted into density modulation after a dispersive section. In this paper, we study this method in a compact accelerator with electron energy on the order of 50 MeV. To interact with an infra-red laser, the modulation undulator is resonant with the laser at a harmonic frequency. We show the flexibility of this method to generate powerful, narrow-bandwidth radiation between 1-20 THz. The THz radiation can be generated at a very high-repetition rate that matches a high-repetition rate X-ray free-electron laser for pump-probe studies of novel materials.