A power tool has a casing and a motor assembly installed within the casing. The motor assembly comprises a motor, a heat dissipation device, a fan and a guiding member. The motor has a stator and a rotor. The heat dissipation device has an annular heat absorbing section which is fitted to a housing of the stator and a plurality of fins extending from the heat absorbing section for dissipating heat. Air flow generated by the fan is guided to the fins of the heat dissipation device by the guiding member to cool the motor.