The paper deals with thermal modelling of Axial-Flux Permanent-Magnet Machines designed primarily for power generation application. The discussed machine adopts water-cooling through an aluminium water jacket sandwiched in between two slotted stator cores. Consistent and repeatable modelling approach to the thermal design and analysis of such water-cooled axial-flux machine includes analytical determination of cooling performance of the cooling jacket at different coolant flow rates analytically, as well as numerically using CFD. The obtained heat transfer coefficient together with 3D transient thermal model thus helps determining temperature rise of the stator windings very accurately, as this has been proven by test results at various load conditions.