This paper describes the development of surface-mounted permanent magnet (SPM) motors for use in direct-drive high-speed spindle machine tools. For such applications, motors should be highly efficient, have low torque ripple, and minimal package size and weight. Based on average torque, torque ripple, and efficiency, four SPM motor designs were chosen for comparison. Two configurations, 2-pole with 3-slots and 2-pole with 18-slots, were selected for analysis. The Taguchi method was used to refine stator structure and to determined how well the selected motors reduced losses. The effect of magnet span angles and winding arrangements on torque ripple, average torque, and the efficiency of 2-pole/18-slot motors was also investigated. A thermal analysis was conducted to determine temperature distribution within the motors. The motor performance was also studied using a Matlab/Simulink model. Experimental measurements and finite element analysis (FEA) were used to examine and validate the results.