In this paper, a sliding mode speed observer for direct torque controlled (DTC) induction motor drives is developed. The speed observer accuracy is guaranteed through the current observer. The rotor speed is estimated by the observer based on the measured and estimated stator currents. The system is firstly simulated by MATLAB and then tested by hardware in the loop. Then, the application is implemented on a TMS320C6711, 32-bit fixed point digital signal processor (DSP). The experimental results show the robustness, feasibility, and performance of the proposed observer structure.