Efficiency optimization of an indirect vector controlled induction motor drive is proposed. The loss models are used in the validation of the fuzzy logic based on-line efficiency optimization control. At steady state, the fuzzy controller adaptively changes the excitation current on the basis of measured input power, until the maximum efficiency point is reached. The pulsating torque, due to flux reduction, has been compensated by an ingenious feedforward scheme. During transient state, rated flux is established to get the best transient response. Through a comprehensive simulation study, the results confirmed the validity of the proposed method.