Because of various errors caused by the dead time of an inverter, temperature variation of resistances, and so on, speed estimation error is inevitable in speed sensor‐less vector control of an induction motor. In particular, the speed control loop becomes unstable at near‐zero frequencies. In order to solve these problems, this paper proposes a novel design of an adaptive observer for speed estimation. By adding a feedback loop of the error between the estimated flux and the flux command, the sensitivity of speed estimation and primary resistance identification is improved. The proposed system is analyzed and appropriate feedback gains are derived. Experimental results showed good performance in the low‐speed range. © 2009 Wiley Periodicals, Inc. Electr Eng Jpn, 169(3): 33–46, 2009; Published online in Wiley InterScience (http://www.interscience.wiley.com). DOI 10.1002/eej.20909