Accurate knowledge of stator resistance is of utmost importance for correct operation of a number of speed sensorless induction motor control schemes in the low speed region. Since stator resistance inevitably varies with operating conditions, stable and accurate operation at near-zero speed requires an appropriate online identification algorithm for the stator resistance. The paper proposes such an identification algorithm, which is developed for the rotor flux-based model reference adaptive system (MRAS) type of the speed estimator in conjunction with a rotor flux oriented control scheme. In this speed estimation method, only one degree of freedom (out of the two available) is utilized for speed estimation. It is proposed to utilize the second available degree of freedom as,a means for adapting the stator resistance online. The parallel stator resistance and rotor speed identification algorithm is developed in a systematic manner, using Popov's hyperstability theory. It increases the complexity of the overall control system insignificantly and enables correct speed estimation and stable drive operation at near-zero speeds. The proposed speed estimator with parallel stator resistance identification is at first verified by simulation. Extensive experimentation is conducted next at low speeds of rotation and successful stator resistance identification is achieved down to 0.5-Hz frequency of rotation.