The paper presents a completely analytical method for determining the eddy currents in a cylindrical configuration. The configuration consists of a cylindrical permanent magnet rotating inside a conducting hollow cylinder (stator). The solution is obtained by solving a generalized form of the diffusion equation and applying the modified Bessel functions. The determination of the magnetic field in the air and in the stator, and the losses generated by the eddy currents, is completely analytical. The results are verified by finite-element software. © 2007 IEEE.