Winding interturn short circuit fault is one of the most common faults of permanent magnet synchronous generator (PMSG), which usually causes irreversible demagnetization of permanent magnet. In order to solve the problem, a special PMSG with the ability to suppress irreversible demagnetization of the interturn short circuit is established. The special structure of the generator is introduced, and then the theory of suppressing demagnetization is explained through mathematic deduction. The model of the generator is established by Flux software and sudden interturn short circuit fault of the generator during the operation is simulated. The minimum magnetic flux density value at each point of the permanent magnet in the short circuit process is compared with the inflexion magnetic flux density of the demagnetization curve at the corresponding temperature. According to this, the demagnetization of permanent magnet under different short circuit faults is analyzed and the feasibility of suppressing demagnetization is verified.