This paper investigates a drive system with energy recovery which uses a 3-phase 1-kW 36-slot 12-pole distributed winding outer-rotor surface-mounted permanent-magnet synchronous motor (SPMSM) and surface-mounted permanent-magnet synchronous generator (SPMSG), which can be used in indoor exercise bicycles. In order to extend drive system operating speed range, the constant torque control, flux-weakening control, and maximum torque/voltage control are used to extend its operation speed up to 1.75 times rated speed. In addition, a predictive speed controller and a predictive current controller are proposed to improve transient responses, load disturbance responses, and tracking responses. A digital signal processor, type TMS-320F-28035, manufactured by Texas Instruments, is used as a control center for the proposed SPMSM/SPMSG drive system. Experimental results validate the feasibility and correctness of the proposed methods.