AbstractThis paper presents the nonlinear modeling of a permanent‐magnet induction machine (PMIM). The PMIM has a permanent‐magnet (PM) rotor that is free to rotate inside a squirrel‐cage rotor. The internal self‐excitation from this PM rotor allows the PMIM to operate at a higher power factor. Utilizing a duality between magnetic and electric circuits, an electrical equivalent circuit that can accurately include the nonlinearity of the excitation circuit is derived. Based on this equivalent circuit, a measuring method of circuit parameters and a calculation method of the steady‐state performance are explained. In addition, the generating characteristics of the PMIM in the grid‐connected mode are theoretically calculated to verify the validity of the derived equivalent circuit, and the results are confirmed through experiments. © 2003 Wiley Periodicals, Inc. Electr Eng Jpn, 144(1): 58–67, 2003; Published online in Wiley InterScience (www.interscience.wiley.com). DOI 10.1002/eej.10189