In this paper a new sliding mode flux and speed observer is proposed for indirect field oriented induction motor drive system. The error between the actual and observed currents converges to zero, which guarantees the accuracy of the flux observer. The rotor speed and the rotor time constant are estimated based on the estimated stator currents and rotor flux. The estimated rotor time constant is used in slip calculation and observer structures and the estimated speed is used as feedback to the speed regulation. Computer simulation and experimental results of the speed control verify the validity of the proposed speed estimation algorithm. The experimental results show the robustness and performance of the proposed observer structure. Experimental results have been realized without load, with load and with external disturbances. (C) 2006 Elsevier B.V. All rights reserved.