Aiming at the problems of too many stator slots, large machine quality and low torque density of fault-tolerant permanent magnet rim driven machine, a fluxmodulated fault-tolerant permanent magnet rim driven machine was proposed. The operation principle of the machine was investigated by theoretical analysis, and the influence of critical parameters of stator on inductance and back EMF was studied by single parameter scanning. The machine optimization was carried out by response surface method and multiobjective genetic algorithm to obtain the optimal parameters of stator and rotor. The air gap flux density, back EMF, electromagnetic torque and fault tolerance of machine were analyzed by FEA. The results show that the fluxmodulated faulttolerant permanent magnet rim driven machine has higher torque density and stronger fault-tolerant ability.