Abstract This paper reports the wakefield effects driven by a high-intensity relativistic electron bunch in a dielectric lined waveguide (DLW). A state-of-the-art electron bunch is employed to serve as the drive bunch, which has an rms length of 10µm, i.e. 33fs, and a charge of 200pC. Such bunch parameters are comparable to those of DESY’s FLASH and SLAC’s LCLS and FACET facilities. It is demonstrated that coherent Cherenkov radiation (CCR) at the fundamental mode with frequency above 1THz and accelerating gradient as high as 2GV/m can be obtained in a single layer cylindrical diamond-DLW structure, as long as the geometrical parameters of the DLW are properly selected to match the drive bunch. Wakefield-induced energy modulations on the drive bunch itself are studied as well, which can be used to reduce its energy spread or to produce microbunches with much shorter length from it. The simulated results agree well with the theoretical predictions. Such wakefields can be used to accelerate or modulate electron bunches with ultra-high gradients, and produce high power THz radiations directly. These properties have potential applications in the fields of compact colliders and advanced radiation sources.