This paper proposes a new loss minimization control method for the vector controlled induction motors. The aim of the proposed loss minimization method is how to determine the optimal flux reference to minimize the total loss of induction motor. Even though the proposed algorithm is based on the equivalent circuit of induction motor including iron loss and leakage inductance, the algorithm is easy to be found and simple to be implemented. Futhermore, the proposed loss minimization algorithm can be applied easily to the traditional vector control system without any additional hardware. Simulation and experimental results are given to validate the effectiveness of the proposed method.