The paper presents a speed estimator for the induction motor (IM) drive. The estimation method is based on the rotor flux MRAS principle and uses sliding mode theory. In sensorless speed control, the accuracy and dynamic behavior of the speed estimate are important since this is used for feedback. The proposed estimation method uses the rotor fluxes as reference quantities in a MRAS scheme and attempts to estimate simultaneously the IM speed and the rotor time constant. Adaptation equations for the speed and the time constant are adopted based on Lyapunov's theory of nonlinear stability. With the equations obtained, due to singularity, only a speed estimator is obtained. The method assumes that the rotor fluxes in the stationary reference frame are available and uses them as reference quantities - this is the typical case with a direct field oriented IM drive. Simulation results on a 1/4 hp three-phase motor show good accuracy and satisfactory estimation dynamics.