Electric machines are being deployed in industrial applications where previously only mechanical systems were considered, as environmental concerns from burning fossil fuels and energy costs are becoming a more dominant factor in system design considerations. Electric machines offer greater operational flexibility and typically higher efficiencies. There has therefore been a growing demand to develop electric machines to replace traditional mechanical systems in a number of industrial applications. One such suitable electric machine topology is the 'direct-drive' machine. These machines can be used where implementation does not require a high operating speed, therefore eliminating the necessity of a gearbox. Furthermore, direct-drive machines offer a number of advantages including reductions in through-life costs, noise and vibration, and overall system volume. This thesis explores the development of direct-drive rim-driven machines, constructed by integrating a propeller with the electric machine that is driving it, by mounting the machine directly around the outside of the propeller. A novel machine topology was developed by integrating a conducting-can onto the rotor structure capable of producing induction torque, to create a motor that can start directly from the main electric supply. This eliminated the need for a power electronic converter, gearbox and complicated drive shafts arrangement, for use in applications where only a low duty cycle of operation was required such as secondary propulsion systems for marine applications or where safety and reliability is of significant importance. A number of other industrial applications that may benefit from this canned rim-driven topology were also identified including seal-less pumps and 'run-of-the-river' generators.Permanent-magnet and induction motor topologies operating in fluid environments were investigated, using finite element analysis and thermal analysis techniques, to examine and optimise the design of the rim-driven topology for a specific operational requirement, in each industrial application area identified. A 30 kW canned line-start rim-drive induction motor was designed and developed for use as a bi-directional thruster on-board a tidal stream turbine. A novel induction motor topology was developed utilising only a conducting-can on the rotor, which eliminated the need for a traditional squirrel-cage, due to the ratio of the relatively large mean air-gap diameter to the small output power requirement; creating a simple yet reliable direct-drive canned induction motor. The design of this motor was manufactured and successfully tested to validate the design process.