Growing consciousness and need for drawing sinusoidal current from the utility, both for optimal utilization of the utility power plant capacity and to minimize harmonics injection into it, require the study of the impact of the power factor correction circuit on inverter-fed induction motor drive systems. This paper is concerned with such a study of a three phase PWM inverter-fed induction motor drive with single phase utility input, and with and without a power factor correction circuit. In the case of the study, detailed comparisons of system and induction motor efficiencies, inverter output voltage and current and input power factor, against rotor speed and output are made. A steady state model of the system including that of the inverter and power factor correction circuit, is developed as part of this study to predict the system performance for all kinds of loads. The analytical results are correlated to experimental results obtained from a prototype 1 HP induction motor drive system with speed feedback and constant Volts/Hz control strategy. It is found that the system performance with the power factor correction circuit is better than without it but only marginally in regard to system efficiency, and that too only from 0.7 p.u. speed and above for a fan type load. The paper also covers other types of common loads such as constant and frictional types.