Torque ripple is a major problem for permanent-magnet (PM) machines. It is examined by focusing on the magnetic circuit of the PM machine. Because there is a relationship between the torque ripple and the magnetic energy that is stored in the magnetic field along the air gap of the PM machine, a variation in the magnetic energy was revealed initially. A new magnet geometry is obtained by forming ledges and notches in the permanent magnets to modify the variation of the magnetic energy and the fluctuation in torque. Thus, a new PM design is proposed in this study to minimize the torque ripple of an outer-rotor surface-mounted PM machine. An improvement of 44.6% in the torque ripple is achieved thanks to the new magnet design. In addition, improvements are made in the average torque and the total harmonic distortion of the back electromotive force.