This paper presents an algorithm that enables single-sensor operation of vector-controlled three-phase permanent-magnet-synchronous-motor voltage source inverter (VSI)-based drive systems. The closed-loop operation is performed through measuring only the VSI dc-link current. The measured VSI dc-link current is fed to a space-vector-based lookup table, which reconstructs the motor line currents. Three Luenberger-style observers are used to filter out the reconstructed motor line currents and estimate the rotor position and speed. The effect of observer bandwidth on the accuracy of the motor's estimated parameters is also investigated. The drive system's physical dynamic stiffness is used as a key metric to compare the drive system performance in single-sensor mode and fully sensored mode, in order to find the lowest steady-state speed limit for the single-sensor drive system operation. © 2014 IEEE.