A magnetically geared machine having an integrated cooling concept is provided. The machine includes a rotor having an inner surface and an outer surface, a magnet assembly coupled to one of the inner or outer surfaces of the rotor, and a stator having a plurality of stator windings. The machine further includes a magnetic flux modulator interposed between the rotor and the plurality of stator windings, where the flux modulator includes a plurality of magnetically conductive portions and a plurality of non-magnetically conductive portions placed alternately, where one or more of the plurality of non-magnetically conductive portions comprise a channel for a cooling fluid.