A fully digital AC drive for servo application is presented in this paper. The design is based on a 32-bit embedded microprocessor (Intel 80960KB). Due to its high performance, hardware has been reduced by transferring them into software functions. This results in a compact design and a very flexible system. Moreover, it allows modern control algorithms to be implemented easily. In this implementation, a variable structure servo controller with a fast acting current vector controller have been designed in software. The experimental results have demonstrated that the motor drive has good dynamic performance.