Wingtip-mounted propellers installed in a tractor configuration can decrease the wing induced drag by attenuating the wingtip vortex by the propeller slipstream. This paper presents an aerodynamic analysis of the propeller–wing interaction effects for the wingtip-mounted propeller configuration, including a comparison with a conventional configuration with the propeller mounted on the inboard part of the wing. Measurements were taken in a low-speed wind tunnel at Delft University of Technology, with two wing models and a low-speed propeller. Particle-image-velocimetry measurements downstream of a symmetric wing with integrated flap highlighted the swirl reductions characteristic of the wingtip-mounted propeller due to wingtip-vortex attenuation and swirl recovery. External-balance and surface-pressure measurements confirmed that this led to an induced-drag reduction with inboard-up propeller rotation. In a direct comparison with a conventional propeller–wing layout, the wingtip-mounted configuration showed a drag reduction of around 15% at a lift coefficient of 0.5 and a thrust coefficient of 0.12. This aerodynamic benefit increased upon increasing the wing lift coefficient and propeller thrust setting. An analysis of the wing performance showed that the aerodynamic benefit of the wingtip-mounted propeller was due to an increase of the wing’s effective span-efficiency parameter.