Applications for low-speed high-torque machines include marine propulsion and wind power generation. Since electric machinery size is more directly related to required torque than to required power, high required torque leads to large machines. Mechanical gears increase the speed and lower the required torque of themachine to reduce size. This, however, results in increased noise and maintenance, and decreased reliability. Magnetic gears offer the advantages of mechanical gears without the disadvantages created by physical contact. Integrating magnetic gears into the machine structure offers additional mass savings. This study proposes a novel machine architecture, which integrates magnetic gearing and a permanent magnet synchronous machine to create an inner rotor flux-modulated permanent magnet synchronous machine. Unlike previous arrangements, the proposed machine utilizes a more desirable inner rotor configuration and avoids multiple magnet arrays. This study presents a finite-element-based design model of the proposed machine to be utilized in an optimization-based design environment. A multiobjective design study is presented for a laboratory scale application. The resulting tradeoff between mass and loss is comparedwith that of a permanentmagnet synchronous machine for the same application.