The purpose of this study is to develop a direct-drive, high-efficiency, small-sized axial gap microhydro-electric generator whose diameter is around 300 mm - 500 mm and output power is 1 kW at 20 rpm. In this designing, we have tried to use magnetic material attached flux concentration permanent magnet (MFCPM) arrangement in order to feed larger magnetic flux. Also the magnetic flux is enhanced by inserting a piece of electrical steel sheets in the MFCPM arrangement. The structure of the MFCPM arrangement, the combination of the segmented permanent magnets and the electrical steel sheets is optimized in cut-and-try optimizations by using the three-dimensional finite element method. The calculated result is compared with that of the surface permanent magnet (SPM) type axial gap generator with a combination of 36 poles - 54 slots.