In order to improve the reliability of the motor and the drive system, a mathematical model of stator tooth flux under eccentricity fault was established. Based on the space and time distribution of the tooth fluxes under eccentricity, a fault indicator was proposed which can comprehensively reflect the eccentricity fault and the corresponding parameters. On the basis of real-time tooth fluxes measuring, the extraction method of the fault indicator and the diagnosis method for the eccentricity fault and its type, orientation, and severity were proposed. Simulation and experimental results show that the proposed method can diagnose eccentricity fault accurately and effectively in the full range of operation. It can monitor eccentricity in real-time, effectively reduce the loss caused by the fault, and improve the reliability of permanent magnet synchronous motor and the drive system.