Retaining sleeves are widely used in high-speed generator to ensure that rotors never move along radial direction and they also would affect the electromagnetic performance of motors. Two-dimensional model of transient electromagnetic field of a high speed PM generator is established in this paper. Several types of sleeves made of different materials such as copper, carbon-fiber and austenitic steel is introduced in this paper, and the eddy current loss of different types of retaining sleeve are calculated by time-stepping finite element methods. Using results from loss calculation the thermal model is described and a steady thermal analysis is carried out. Studies show that, carbon-fiber reinforced composite which is not suitable to shield eddy current, but can be used together with copper screen as retaining sleeve to strengthen rotor.