This article proposes and investigates a novel dual winding dual magnet machine (DWDM). The obvious structure of the DWDM is that armature windings and permanent magnets (PMs) are arranged in both the stator and rotor sides. Based on the unique slot/pole combination, the stator windings and the rotor windings can interact with the stator PMs and the rotor PMs to produce four torque components, respectively. Therefore, the torque density of DWDMs has been greatly improved. In addition, the proposed DWDM has compound fault-tolerance (CFT) capability, including phase fault tolerance (PFT) and winding fault tolerance (WFT), and can operate under multiple fault conditions. In this article, the machine topology and operation principles of DWDMs are first illustrated. Then, through finite element analysis (FEA), the electromagnetic performance is analyzed. Moreover, the CFT capability of DWDMs is illustrated and discussed. Finally, a prototype machine is designed, manufactured, and tested. Experimental results verify the feasibility of the proposed DWDM as well as the FEA predicted performance.