It is shown that the magnetic-field coils of a stellarator can, at least in principle, be substantially simplified by the use of permanent magnets. Such magnets cannot create toroidal magnetic flux but they can be used to shape the plasma and thus to create poloidal flux and rotational transform, thereby easing the requirements on the magnetic-field coils. As an example, a quasiaxisymmetric stellarator configuration is constructed with only 8 circular coils (all identical) and permanent magnets.Stellarators, tokamaks and other devices for fusion plasma confinement use electromagnets to create the magnetic field. In the case of stellarators, the required magnetic-field coils can be very complicated and contribute significantly to the overall cost of the device [2]. In the present Letter, we suggest that permanent magnets could be used to shape the plasma and drastically simplify the coils. Our emphasis is on mathematical aspects of this problem whereas other issues are discussed in a companion paper [1].A magnetic field B tracing out toroidal surfaces can never be created by permanent magnets alone, because it follows from Ampère's law that the loop integral of the magnetic field taken once toroidally around the torus is proportional to the linked current of free charges,This conclusion follows from one of Maxwell's equations,if the integration contour C is chosen to lie within the plasma, where the magnetization M vanishes. In other words, permanent magnets cannot create a net toroidal magnetic flux, but they can (perhaps surprisingly) create poloidal flux and thus twist the magnetic field lines in a stellarator (though not in an axisymmetric device such as tokamak).To see how this can be accomplished, we write the magnetic field as a sumrepresents the field created by coils and B m that from the permanent magnets. The magnetization M vanishes outside a bounded domain Ω but is generally finite on the boundary ∂Ω and produces a magnetic fieldwhere n is the unit vector pointing outward from Ω. Our aim is to find a magnetization field M that creates a desired magnetic field B m within the plasma region, which we denote by P . Since many different choices of M produce the same magnetic field, the solution is not unique and there is considerable freedom to find the simplest one. One way to solve the problem is to reduce it to one already routinely solved in stellarator design. This problem was first described by Merkel [3] and proceeds from the observation that the magnetic field within the plasma is uniquely determined by the shape of the plasma boundary ∂P and the current and pressure profiles within the plasma [4]. Suppose, therefore, that a desired plasma surface ∂P is prescribed and consider the problem of finding the surface current K = n × ∇Φ(2) on another toroidal surface ∂D, some distance from the plasma, that creates a magnetic field tangential to ∂P . In the method of Merkel, this is done by choosing the scalar function Φ on ∂D so as to minimize the surface integral ∂P |n · B| 2 dS.(This problem is ill-pose...