The inductance of the internal permanent magnet synchronous motor (PMSM) will decrease as the saturation of the magnetic circuit deepens, which results in parameters variation with the running condition varying in the motor control system. Therefore, the accurate identification of inductance parameters has a great influence on the control performance of the motor. To solve this problem, a least squares inductance identification method based on forgetting factor is proposed using the transient voltage equation of PMSM. A simulation model is established, and the results of the identification method are obtained when the speed and torque change. Based on the dSPACE experiment platform, the identification method is verified by experiments. Comparison between simulation and experimental results proves that this method has good realtime performance and effectiveness in the control of internal PMSM.