The conventional linear permanent magnet generator (CLPMG) for direct-drive wave energy conversion (WEC) has experienced many drawbacks that are difficult to overcome such as low power density and bulky system volume. To improve power density, this paper proposes a linear magnetic-geared interior permanent magnet generator (LMGIPMG) with tubular topology, which artfully incorporates a linear magnetic gear into a linear permanent magnet generator. The operating principle of the LMGIPMG is introduced, and a detailed analysis of air gap flux density, thrust force characteristics, and no-load and load performances are presented and discussed by using finite element method. The CLPMG, which produces the same power as the LMGIPMG, has about four times the volume of the latter. A prototype CLPMG is manufactured to verify simulation results against experimental tests. The design method and the operation conditions of LMGIPMG and CLPMG are both consistent; thus, the performance of LMGIPMG meets the operation requirements of the direct-drive WEC.