The paper discusses the problem of rotor flux magnitude estimation for the induction motor (IM) drive and presents a state observer that is constructed using the IM model in the synchronous reference frame. Generally, for IM vector control implementation, the magnitude of the rotor flux is required. If flux regulation is intended, the flux magnitude is used in feedback in order to generate the d axis reference current. Also, if synchronous current regulation with decoupling is intended; the flux magnitude is used to compute the decoupling voltages. Generally, in an IM drive, it is typical to estimate the stationary frame fluxes using an observer and to use the tan-1 function to calculate the field orientation angle. Then, the flux magnitude is calculated from the estimated α,β flux components. However, some observers (that use a speed estimate instead of the measured speed) do not yield α-β fluxes with accurate magnitude. As a result, the flux magnitude would need to be obtained from another source. The paper presents a state observer for the flux magnitude based on the synchronous reference frame model of the IM. This is developed assuming that the d-q axis voltages and currents are known. A speed sensored observer is developed first. The attempt to transform it into a sensorless design by feeding it with a speed estimate (assumed inaccurate) does not yield an asymptotically stable observer. The paper also studies the estimation accuracy under improper speed and with improper field orientation angle.