Permanent magnet machines are widely applied in motor drive systems. Therefore, condition monitoring of permanent magnet machines has great significance to assist maintenance. High temperatures are accountable for lots of typical malfunctions and faults, such as demagnetization of the permanent magnet (PM) and inter-turn short circuit of stator windings. Therefore, temperature monitoring of the PM and stator windings is essential for reliable operation. In this paper, an overview introducing and evaluating existing thermal monitoring methods is presented. First, the mechanism of thermal-caused failures for the PM and stator windings is introduced. Then, the design procedure and principles of existing temperature monitoring methods are introduced and summarized. Next, the evaluations and recommendations of application feasibility are demonstrated. Finally, the potential future challenges and opportunities for temperature monitoring of the PM and stator windings are discussed.