Improving the efficiency of induction motors, which are the most energy consuming electric machines in the world, saves much energy. The efficiency can be increased by improving cooling performance as well as by using better materials or by improving electromagnetic performance with better design. This paper presents the relationship between the efficiency or the losses and the temperature of coils with experiments as well as simulations by changing parameters such as the load and the flow rate of cooling air. The losses and the efficiency are calculated from an equivalent circuit method as well as experiments. Coil temperatures variation affects much on the efficiency. The internal cooling method is better than that of external cooling for the coil temperature reduction. Several cooling methods are compared focusing on the fan efficiency and performance, from which the values of the efficiencies of the motors are expected. The fan efficiency as well as the fan performance should be considered for the optimum fan design to increase the total efficiency of a motor. The simulations are validated by the comparison with the experiments.