A new on-line dead-time compensation method for a permanent magnet (PM) synchronous motor drive is proposed. Using a simple disturbance observer without any additional circuit and off-line experimental measurement, disturbance voltages in the synchronous reference dq frame caused by the dead time and non-ideal switching characteristics of power devices are estimated in an on-line manner and fed to voltage references in order to compensate the dead-time effects. The proposed method is applied to a PM synchronous motor drive system and implemented by using software of a digital signal processor (DSP) TMS320C31. Simulations and experiments are carried out for this system and the results well demonstrate the effectiveness of the proposed method.