The difficulty of rotor position and speed estimation for sensorless position of built permanent magnet synchronous motor (IPMSM) was discussed. A method of rotor position and velocity estimation based on improved stator flux observer was proposed. By introducing the concept of effective flux linkage, the voltage equation of IPMSM was transformed equivalently, and then the back electromotive force in the two phase stationary coordinate system was integrated. In order to suppress the integral saturation and DC drift problems caused by the integral part of the back electromotive force, a low-pass filter with automatic cut-off frequency was designed instead of the integrator. For the low-pass low-pass filter caused by the flux amplitude attenuation and phase advance problems, the use of saturated feedback compensated for the observation error. The phase locked loop was used to estimate the position. The MATLAB/Simulink simulation platform was built. The simulation results show that this method can realize the high accuracy estimation of the rotor position in the full speed range of the built-in permanent magnet synchronous motor.