This work presents an experimental method appropriate for determining magnetically nonlinear characteristics of electric machines which contain magnetically nonlinear and anisotropic iron core, damping windings, and permanent magnets. The method is based on the two-axis dynamic model of a three-phase machine with wye-connected three-phase stator winding. The d-axis is defined with the magnetic axis of permanent magnets (ldquoflux linkage vectorrdquo due to the permanent magnets), while the q-axis is displaced by electrical pi/2. The tested machine is supplied by a controlled voltage source inverter. Voltage in one axis is changed in the stepwise manner, while current in the orthogonal axis is closed loop controlled. The characteristic flux linkage versus current in the form of a hysteresis loop is determined numerically using the time behavior of measured applied voltage and responding current in the same axis. Unfortunately, the currents induced in the machine's damping windings or squirrel cage disturb the flux linkage characteristic determined in this way. Therefore, only the final points of each hysteresis loop, where the currents induced in the damping windings already died-out, can be used as correct points of the machine's magnetically nonlinear iron core characteristic. The proposed method is confirmed by the tests performed with a single three-phase stator and four different rotors: the reluctance rotor, the reluctance rotor with squirrel cage, the reluctance rotor with inserted permanent magnets, and the reluctance rotor with inserted permanent magnets and squirrel cage.