In this study, basic concepts of magnet were introduced, and dynamic characteristics of magnet coupling were explored. Based on these characteristics, it was proposed how to analyze transverse and torsional vibrations of a spindle system with magnet coupling. Proposed theoretical approaches were applied to a precision power transmission system machined for this study, and the transverse and torsional vibrations were simulated. The force on magnet coupling was shown as a form of nonlinear function of the gap and the eccentricity. Also, the form of torque transmitted by magnet coupling was considered as a sinusoidal function. Main spindle connected to a coupling of a follower part was assumed to be a rigid body. Nonlinear partial differential equation was derived to be as a function of angular displacement. By using the equation, torsional vibration analysis of a spindle system with magnet coupling was performed. Free and forced vibration analyses of a spindle system with magnetic coupling were explored by using FEM.