--This paper proposes a computationally efficient method based on imaging technique, for accurate prediction of 3-dimensional (3D) eddy current loss in the rotor magnets of interior permanent magnet (IPM) machines. 2D time-stepped finite element analysis is employed to generate the radial and the tangential 2D magnetic field information within the magnet for application of the 3D imaging technique. The method is validated with 3D time-stepped finite element analysis (FEA) for an 8 pole-18 slot IPM machine evaluating its resistance limited magnet loss with increase in axial and tangential segmentation. Magnet loss considering eddy current reaction at high frequencies is evaluated from the proposed method by employing the diffusion of the 2D magnetic field variation along the axial plane. The loss associated with all the frequencies together in the armature currents is evaluated by considering each of the harmonics separately in the proposed method employing the frozen permeability to account for magnetic saturation. The results obtained are verified with 3D FEA evaluating the magnet loss at fundamental, 10 and 20 kHz time harmonics in armature currents.Index Terms-Eddy current loss, finite element, frozen permeability, imaging method, permanent magnets.