Due to the drawbacks associated with the use of rotor position sensors in permanent-magnet synchronous motor (PMSM) drives, there has been significant interest in the so-called rotor position sensorless drive. Rotor position sensorless control of the PMSM typically requires knowledge of the PMSM structure and parameters, which in some situations are not readily available or may be difficult to obtain. Due to this limitation, an alternative approach to rotor position sensorless control of the PMSM using a. diagonally recurrent neural network (DRNN) is considered. The DRNN, which captures the dynamic behavior of a system, requires fewer neurons and converges quickly compared to feedforward and fully recurrent neural networks. This makes the DRNN an ideal choice for implementation in a real-time PMSM drive system. A DRNN-based neural observer, whose architecture is based on a successful model-based approach, is designed to perform the rotor position estimation on the PMSM. The advantages of this approach are discussed and experimental results of the proposed system are presented.