We present a finite-element method for numerical calculation of electromagnetic fields in silicon steel that takes into account the effect of mechanical stress on the steel's mechanical properties. The effect of the mechanical stress is considered in terms of the magnetic permeability in each element. To evaluate the usefulness of the calculation method, we have applied it to an electric motor under uniform and nonuniform mechanical stress distribution. In case of uniform stress distribution, the iron loss distribution is uniform too. The area of increased iron loss corresponds to the area where the mechanical compressive stress is applied. In case of nonuniform mechanical stress distribution, the magnetic flux flows so as to avoid the mechanical compression stress area. The iron loss has a tendency to increase further under mechanical compressive stress because of the increase of the magnetic flux density in the zone of no mechanical stress and the poorer characteristics of the iron loss as a function of magnetic flux density under mechanical compressive stress.