Permanent-magnet (PM) synchronous machines (PMSMs) can provide excellent performance in terms of torque density, energy efficiency, and controllability. However, PMs on the rotor are prone to centrifugal force, which may break their physical integrity, particularly at high-speed operation. Typically, PMs are bound with carbon fiber or retained by alloy sleeves on the rotor surface. This paper is concerned with the design of a rotor retaining sleeve for a 1.12-MW 18-kr/min PM machine; its electromagnetic performance is investigated by the 2-D finite-element method (FEM). Theoretical and numerical analyses of the rotor stress are carried out. For the carbon fiber protective measure, the stresses of three PM configurations and three pole filler materials are compared in terms of operating temperature, rotor speed, retaining sleeve thickness, and interference fit. Then, a new hybrid protective measure is proposed and analyzed by the 2-D FEM for operational speeds up to 22 kr/min (1.2 times the rated speed). The rotor losses and machine temperatures with the carbon fiber retaining sleeve and the hybrid retaining sleeve are compared, and the sleeve design is refined. Two rotors using both designs are prototyped and experimentally tested to validate the effectiveness of the developed techniques for PM machines. The developed retaining sleeve makes it possible to operate megawatt PM machines at high speeds of 22 kr/min. This opens doors for many high-power high-speed applications such as turbo-generator, aerospace, and submarine motor drives.