A gradient Si steel sheet, which has high Si content in the surface layer and low Si content in the center of the thickness, shows extremely low iron loss in the high frequency range. In this paper, the magnetic properties of gradient Si steel sheets under compressive stress were investigated. In a 3.5%Si steel sheet, the iron loss under compressive stress increases with increase in compressive stress. On the other hand, a gradient Si steel sheet shows extremely low iron loss under compressive stress. This decrease is due to the residual tensile stress in the surface layer of the gradient Si steel sheet. To evaluate the effect of core materials on the iron loss of the motor, we fabricated IPM (Interior Permanent Magnet) motors using 3%Si steel, 6.5%Si steel, and gradient Si steel sheets. In the motor using a 3%Si steel sheet, the motor loss increases after the heat shrinking. On the other hand, in the motors using 6.5%Si steel and gradient Si steel sheets, the motor loss shows little change after the heat shrinking.