This paper presents a permanent magnet servo motor, built with a powdered iron stator, which has been designed to take full advantage of the properties of the material. There are a number of important design features which are not possible with laminated cores. For example, the core back is axially extended over the end windings, the armature core components are sub-divided and pre-formed stator coils are used. The coils are pre-pressed to form a solid component with an exceptionally high fill factor (78%). The prototype offers far superior performance to a conventionally laminated commercial machine, manufactured in the same frame.