Abstract It is the intention of this paper to propose a compact flywheel energy storage system assisted by hybrid mechanical-magnetic bearings. Concepts of active magnetic bearings and axial flux PM synchronous machine are adopted in the design to facilitate the rotor–flywheel to spin and remain in magnetic levitation in the vertical orientation while the translations and rotations along and about x and y axes are constrained by mechanical bearings for simple operation. In this paper, the mathematical model of the flywheel’s levitation force and rotational torque is developed. The control systems of the position and velocity of the flywheel are designed based on PID method. Experiments are carried out and its test results prove the feasibility of the proposed flywheel system concept, the correctness of the mathematical analysis and the validity of the designed control system.