This paper analyzes eddy-current loss induced in magnets of surface-mounted permanent magnet (SPM) machines by using an analytical method such as a space harmonic method. First, on the basis of a two-dimensional (2D) polar coordinate system and a magnetic vector potential, the analytical solutions for the flux density produced by armature winding current are obtained. By using derived field solutions, the analytical solutions for eddy current density distribution are also obtained. Finally, analytical solutions for eddy current loss induced in rotor magnets are derived by using equivalent electrical resistance calculated from magnet volume and analytical solutions for eddy-current density distribution. In particular, the influence of time harmonics in armature current on the eddy current loss is fully investigated and discussed. All analytical results are validated extensively by finite element analysis (FEA).