This paper presents a design of a magnetic-bearing system well suited for a smaller rotating machine. The system contains two 3-pole active radial bearings and an optimal passive axial bearing. The effects of number of stator poles are investigated on the rotor outside diameter for an outer-rotor type of radial bearing, and the investigation reveals that 3-pole bearings yield the smallest rotor outside diameter for a stator-eore diameter less than 50 mm. The structural configuration of the axial bearing is also optimized to have the largest support stiffness. Those radial and axial bearings are integrated in a homopolar configuration to yield a smaller magnetic-bearing system.