In view of this problem, a method of novel sliding mode observer (SMO) of saturation function for PMSM based on the analysis of the principle of the conventional SMO was proposed. The state observation equation of back electromotive force (EMF) was constructed, and Lyapunov stability theory was used to prove the convergence. Meanwhile, the given of observer gain coefficient and low pass cutoff frequency are considered. The observation coefficient and cut off frequency of low pass filter was selected according to realtime speed feedback. The Calman filter is added to remove the measurement noise and measurement error of the system. The simulation and experiment results verified improved new type of SMO of saturation function algorithm was effective and practical.