Factors such as insufficient heat dissipation and excessively high temperature can easily lead to demagnetization of the PMs in permanent-magnet (PM) motors. As a result, the magnetic field distribution of the motor will not be uniform, producing fault harmonics and lowering the operational performance of the motor. An essential stage in the diagnosis of faults and the monitoring of motor condition is the establishment of an accurate model of motors with demagnetization faults. In this paper, demagnetization faults are modeled by changing the Fourier coefficients in the Fourier expansion of the magnetization of PMs. This model can be used to determine the motor performance under various types of demagnetization, including radial air gap flux density, back electromotive force (EMF), and torque. On this basis, the corresponding relationship between the demagnetization degree and the fault signature is established, to provide a theoretical foundation for the subsequent demagnetization fault diagnosis. The finite element analysis (FEA) verifies the effectiveness and superiority of the proposed analytical model. The modeling method proposed in this paper can be applied to PM motors with PMs having different magnetization directions and shapes because it is based on the demagnetization region of PMs.