A permanent magnet motor and a power tool are provided. The permanent magnet motor includes an excition and an armature. One of the excition and armature comprises a first magnetic core with permanent magnet members embedded therein. The permanent magnet members are arranged along a circumferential direction of the first magnetic core, such that an inner circumferential surface of the first magnetic core forms a plurality of magnetic poles with alternative polarities. The other of the excition and armature comprises a second magnetic core and windings. The second magnetic core is received in the first magnetic core and comprises teeth with the windings wound therearound. The embedded construction prevents the permanent magnet members from becoming disengaged from the magnetic core. A stronger magnetic pole can be formed by mutual induction of the permanent magnet members and the magnetic core, which increases the power density of the motor.