A fault-tolerant permanent-magnet vernier (FT-PMV) machine is designed for direct-drive applications, incorporating the merits of high torque density and high reliability. Based on the so-called magnetic gearing effect, PMV machines have the ability of high torque density by introducing the flux-modulation poles (FMPs). This paper investigates the fault-tolerant characteristic of PMV machines and provides a design method, which is able to not only meet the fault-tolerant requirements but also keep the ability of high torque density. The operation principle of the proposed machine has been analyzed. The design process and optimization are presented specifically, such as the combination of slots and poles, the winding distribution, and the dimensions of PMs and teeth. By using the time-stepping finite element method (TS-FEM), the machine performances are evaluated. Finally, the FT-PMV machine is manufactured, and the experimental results are presented to validate the theoretical analysis.