The application of a sliding mode control for improving the dynamic response of an induction motor based speed control system is presented in this paper and provides attractive features, such as fast response, good transient performance, and insensitivity to variations in plant parameters and external disturbance. However, chattering is a difficult problem for which the sliding mode control is a popular solution. This paper presents a new fuzzy-sliding mode controller for a sensorless vector-controlled induction motor servo system to practically eliminate the chattering problem for traction applications. A DSP based implementation of the speed control system is employed. Experimental results are presented using a propulsion system simulator. The performance of the drive is shown to be practically free from chattering.