A rotor flux state observer considering iron loss, for an Induction Motor (IM), is proposed. The aim of this proposal is to avoid detuning caused by the IM iron loss on a field-oriented control (FOC). An adaptive scheme for the K-Fe a parameter that represents the IM iron loss, is also proposed. The main objective of this scheme is to improve the dynamic response of control by compensating the variations of iron losses due to possible variations in the stator core characteristics. Simulation results demonstrated that the observer and the adaptive scheme showed a good performance fulfilling then the objectives, (c) 2008 Elsevier Ltd. All rights reserved.