Abstract: [Objective] The nonlinear characteristic of voltage source inverter causes output current distortion, which in turn leads to motor output torque pulsation and affects the control accuracy and stability of permanent magnet synchronous motor drive system. To solve this problem, an online compensation strategy based on the nonlinear disturbance observer (NDO) is proposed at the paper. [Methods] Firstly, the nonlinear factors such as inverter dead time and switching tube voltage drop were quantitatively analyzed. Then the NDO was constructed based on the synchronous rotating coordinate system current equation, the saturation gain function was designed, and the dq axis reference voltages were corrected by the feed-forward compensation channel. However, the NDO was highly sensitive to parameters. Thus, a cascade model reference adaptive parameter identification (CMRAPI) scheme was proposed. And the cascade module parameter identification task was decomposed into two groups of mutually independent identification tasks of stator resistance and permanent magnet magnetic chain as well as stator inductance, and each group of tasks realizes parameter identification through the model-referenced adaptive structure, and then realizes the transmission of the identification results through the cascade module. The proposed scheme could simultaneously identify three motor parameters such as stator resistance, permanent magnet chain and stator inductance, so as to provide parameter support for the NDO , and to reduce the compensation error caused by parameter deviation. [Results] The NDO was capable of high-precision error observation. In addition, the CMRAPI scheme can achieve accurate identification of resistance, magnetic chain and inductance. [Conclusion] The simulation results show that the NDO is able to accurately compensate the disturbance voltage caused by the nonlinear characteristics of the inverter during the long-time operation of the motor, thus effectively suppressing the output current distortion and torque pulsation.