In this paper, dynamic analysis of permanent magnet synchronous motor (PMSM) fed by sinusoidal PWM (SPWM) controlled voltage source inverter (VSI) was studied. Similar to separately excited DC motor, torque and exciting currents are controlled individually by applying vector control technique to the PMSM. Consequently, improving the motor performance is aimed in this study. Currents and speed are controlled with PI controllers. A digital signal processor card ADMC401 developed by Analog Devices was used for implementing vector control algorithm and producing switching signal for VSI. The PMSM was operated under several speed and load conditions. Test results obtained from experiments are presented and then the dynamics of the drive system are also analyzed.