The errors generated from current measurement paths are inevitable, and they can be divided into two categories: offset error and scaling error. The current data including these errors cause periodic speed ripples which are one and two times the stator electrical frequency respectively. Since these undesirable ripples bring about harmful influences to motor driving systems, a compensation algorithm must be introduced to the control algorithm of the motor drive. In this paper, a new compensation algorithm is proposed. The signal of the integrator output of the d-axis current regulator is chosen and processed to compensate for the current measurement errors. Usually the d-axis current command is zero or constant to acquire the maximum torque or unity power factor in the ac drive system, and the output of the d-axis current regulator is nearly zero or constant as well. If the stator currents include the offset and scaling errors, the respective motor speed produces a ripple related to one and two times the stator electrical frequency, and the signal of the integrator output of the d-axis current regulator also produces the ripple as the motor speed does. The compensation of the current measurement errors is easily implemented to smooth the signal of the integrator output of the d-axis current regulator by subtracting the DC offset value or rescaling the gain of the hall sensor. Therefore, the proposed algorithm has several features: the robustness in the variation of the mechanical parameters, the application of the steady and transient state, the ease of implementation, and less computation time. The MATLAB simulation and experimental results are shown in order to verify the validity of the proposed current compensating algorithm.