This paper proposes a new interior permanent magnet machine (IPMM) drive system with low cost and simple configuration. The proposed system consists of a two-phase IPMM, a single-phase H-bridge inverter, and dc link. Between two-phase stator windings, a main winding is supplied by the H-bridge inverter for adjustable speed drives while an auxiliary winding is short-circuited. This structure makes the system operate in a wider range of speed than most single-phase drive systems. Furthermore, the system uses relatively fewer windings and semiconductor devices than a balanced three-phase IPMM system, yet its torque capability in high speed range has not reduced. This paper proves that the single-phase inverter is advantageous over the three-phase one for producing larger fundamental machine phase voltage in the overmodulation range. A square-wave mode voltage modulation scheme is applied to maximize the fundamental component. With an equivalent model of the proposed IPMM, its torque characteristics, operating range, and performance are analyzed and compared to those of conventional IPMM drive systems. In addition, a speed control algorithm aimed at minimizing the copper losses is proposed for higher motor efficiency. The feasibility of the proposed system and control method is verified by experiments under various operating conditions.