A method of forming a flux regulated machine includes winding stator windings into slots in an outer core. The outer core is formed to have a plurality of radially inwardly extending tooth pieces that are circumferentially spaced, and which define the slots. Further, control coils are wound around an inner core. Then, the inner core is inserted within the outer core such that the tooth pieces contact the inner core, and such that the control coils close off the slots at a radially innermost position. A flux regulated permanent magnet machine generally made according to this method is also disclosed.