Induction machines are very competitive in price and maintainability when compared to PM machines and DC machines. Therefore, many induction machines are used for electric vehicles and hybrid vehicles. While it is relatively easy to control an induction machine at high speeds, it is difficult to control the speed and torque of an induction machine at low speeds. With field-oriented control, an induction machine can perform somewhat like a DC machine. This paper demonstrates the theory and implementation of field-oriented control of an induction machine. A mathematical model was developed. Special considerations were given to the flux observer and the implementation of PI controller. A control system was implemented on a 650W prototype induction motor to confirm the proposed method.