The magnetic properties of ferromagnetic cores and the resistance of conductors are severely affected by the high operating temperatures in modern electrical machines. These temperature effects must be taken into account in the electrical machine design process to optimize their performance. In this work, we have proposed a simple material model to predict the change in the single-valued B-H relationship of non-oriented electrical steel with respect to the temperature. The temperature dependent power loss curves have also been measured and are fitted to a two term iron loss formula to compute the magnetic losses. The temperature dependent magnetic properties (B-H relationship and power loss formula) and the resistivity values of the conductors have then been incorporated into the Finite Element (FE) based computer simulations of a transformer core and an induction machine. The effects of temperature on different performance parameters, such as magnetic and copper losses and supply current have been studied.