The critical dimensions of magnet and its positional parameters in a permanent magnet synchronous motor (PMSM) are optimized using Taguchi method. L16 Orthogonal Array (OA) was used in Taguchi method to optimize the magnet width w and thickness t, and magnet position parameters i.e., D1, O1, and Rib. Using the D-optimal design criterion, 52 data points for five factors were selected for optimization of power factor and efficiency using response surface methodology to perform the sensitivity analysis. Regression model for efficiency and power factor are modeled using analysis of variance results. A 1.07 kW capacity PMSM was designed based on the optimized parameters and making use of efficient computational resource, i.e., RMxprt tool of the ANSYS Maxwell software and drive system in ANSYS Simplorer for real time results and performance study. The performance of PMSM in terms of line current, load torque, and efficiency has been verified with the experimental results and the efficiency data available in literature. The results were found to be in a good agreement. Confirmation test results showed that the Taguchi method is very successful in the optimization of permanent magnet synchronous motor dimensions.