This paper presents a mechanical sensorless vector-controlled system with parameter identification by the aid of image processor. Based on the flux observer and the model reference adaptive system method, the proposed sensorless system includes rotor speed estimation and stator resistance identification using flux errors. Since the mathematical model of this system is constructed in a synchronously rotating reference frame, a linear model is easily derived for analyzing the system stability, including motor operating state and parameter variations. Because it is difficult to identify rotor resistance simultaneously while estimating rotor speed, a low-accuracy image processor is used to measure the mechanical axis position for calculating the rotor speed at a steady-state operation. The rotor resistance is identified by the error between the estimated speed using the estimated flux and the calculated speed using the image processor. Finally, the validity of this proposed system has been proven through experimentation.