Induction motor vector control system needs the decoupled of stator and rotor circuits, the key issue is how to observe the rotor flux accurately. Taken the stator current and rotor flux of induction motor in two-phase synchronous rotating coordinate system as state variables, a new rotor flux observer based on sliding mode variable structure theory was put forward. The design of sliding mode control input signal made sliding velocity and the distance between trajectory and sliding-mode surface associated, and the algorithm convergence was proved by the Lyapunov theory. Simulation results showed the high accuracy of rotor flux observer and strong robustness to the rotor resistance change of the proposed method, and can improve dynamic and static performance of the induction motor vector control and speed regulation system.