In this paper, the transient thermal response of a conventional double-layer switched-flux permanent-magnet machine is studied for both healthy and fault conditions such as inter-turn short-circuit. A highly optimized and accurate cosimulation model for different operating conditions is developed requiring low computation and time resources. The electromechanical models for both healthy and faulty operation are implemented in MATLAB/Simulink while the thermal model is implemented using three-dimensional (3-D) finite-element model (FEM) software. Both models are dynamically coupled to enable the influence of temperature rise on the electromagnetic performance and vice versa to be predicted. Operation under various conditions are investigated, and it is found that the temperature rise under fault conditions and high speed can lead to irreversible demagnetization of the permanent magnets. The superposition principle is used to accurately estimate the impact of short-circuit currents on the temperature rise. A series of dynamic tests are carried out to validate the transient thermal response prediction when operating during both the healthy and fault conditions.