As interturn short fault (ISF) in a permanent-magnet synchronous machine (PMSM) degrades its energy efficiency and may cause other problems, accurate fault diagnosis for the PMSMs is necessary. In this paper, we present a method that uses voltage and current residual components to diagnose the phase and the severity of the ISF in PMSMs. A faulty-winding model (FWM) is introduced to analyze the fault; the model describes a relationship between the voltage decrease of the faulty winding to the characteristics of the fault such as a fault resistance and a fault turn ratio. Based on the model, we suggest a fault index (FI) that shows the severity of the ISF. As the ISF induces residual components to both voltage and current, the proposed method utilized those components with the FWM. A least squares (LS) method is used to estimate the FI and to diagnose the ISF of PMSMs. Experimental results demonstrate that the proposed method diagnose the ISF effectively.