Surface permanent-magnet (SPM) machines are normally operated by controlling the d- and q-axis currents. This paper examines the control of SPM generators based on controlling the terminal voltage magnitude V and power-factor angle 8. This is well suited for generator operation when using a switched-mode rectifier and avoids the need for a rotor position sensor. The parameters required for generating a given value of torque with minimum phase current in order to minimize copper losses are derived in this paper. This will be achieved by controlling V and 8 to keep the d-axis current equal to zero at low speed, before switching to field-weakening control at higher speeds. Simulated and experimental results will be used to verify the control strategy and the efficiency achieved.