This paper aims to provide a high-performance sensorless fault-tolerant direct torque control of permanent magnet synchronous motor based on nonlinear position and speed observer. The nonlinear observer is based on a trigonometric function to estimate the rotor position, and a proportional–integral controller is used to estimate the speed from estimated position. A faulty leg (open phase) in the PWM VSI changes the corresponding terminal voltage and introduces the voltage distortions to each phase voltage. The ordinary two-level inverter is composed of three legs. In the proposed fault-tolerant inverter, a redundant leg is added that replaces the faulted leg. The detection of the open-phase fault is based only on the current signals and the maximum threshold they exceed that in case of fault.