Mud motor with integrated MWD system

A measurement-while-drilling system is integrated into a mud motor. The measurement-while-drilling system includes sensors which may include inclination and tool face sensors, for example, located near to the drill bit. Data from the near bit sensors is transmitted by way of telemetry, for example, EM telemetry. The mud motor may include a rotating electrical coupling which provides good electrical productivity between an uphole coupling of the mud motor and the rotating mandrel. The EM telemetry transmitter may include an electrically-insulating gap integrated with the mandrel of the mud motor.