Remanence and coercivity are important parameters to characterize the magnetic properties of permanent magnetic (PM) materials. The variation of PM parameters will lead to the variation of generator output performance. To find out the key PM parameter affecting generator output performance, a 117‐kW, 60 000‐rpm high‐speed permanent‐magnet generator is taken as an example and a 2D finite element model is established. By comparing the calculation results and the test data, the accuracy of the model is verified. By using the field‐circuit coupling method, the mechanism of nonlinear variation of output voltage with the change of load is revealed when the variation degree of remanence and coercivity is consistent. The sensitivities of no‐load electromotive force (EMF), output voltage at rated power, voltage regulation, and overload capability to the variations of PM parameters are studied. Furthermore, the mechanism of PM parameters affecting generator output performance is revealed. The results show that the sensitivity of generator output performance to different PM parameters is different and the influence degree of PM parameters on the generator output performance depends on the permeance of the main magnetic circuit. Finally, the basis for selecting PM parameters is given. The research can assist generator designers to select PM in the design stage. © 2019 Institute of Electrical Engineers of Japan. Published by John Wiley & Sons, Inc.