The slender shape of the driving machine leads to a low rigidity and large axial thermal elongation of the motorized spindle, which deteriorates the machining precision. To solve these problems and pursue a more compact size, this paper investigates the feasibility of using a tooth-coil permanent magnet synchronous machine in a high-speed spindle, replacing the original motor that has the conventional distributed winding. Comprehensive performance and behavior of machines with distributed and tooth-coil windings are comparatively analyzed, in terms of the essential torque ripples, winding inductances, electromagnetic losses, rotor integrity, and heat dissipation of the spindle. Thorough numerical simulation results indicate that the newly designed tooth-coil winding solution shows significant advantages over the original design, regarding high rotor rigidity, low torque ripples, reduced electromagnetic losses, and reduced shaft thermal elongation. Prototypes and test setups for the high-speed tooth-coil machine are built, where preliminary measurements are carried out to validate the analysis results and system design.