Thermal management of the rotating electrical machines is a very challenging area which needs appropriate solutions for each machine and operating condition. The heat is generated by the electromagnetic losses and the mechanical friction during the rotation. Computational Fluid Dynamics (CFD) is used in this study to predict and analyze the thermal performance of a rotating electrical machine where high speed rotation is coupled with small flow gaps. The investigation presented in this paper is based on a geometry used for model assessment and verification purposes. However, the approach outlined and the observations made are transferrable to other geometries. ANSYS Fluent has been used to perform CFD simulation where both the air velocity field and the temperature distribution are obtained. The results are qualitatively highly interesting to understand the thermal behavior within an electrical machine operations. The results show a periodic temperature distribution on the stator surface with similar periodic pattern for the heat transfer coefficient on the rotor surface. The simulated average heat transfer coefficient at the rotor surface is compared with the correlations from published literature with an overall good agreement.