A nonsingular high-order terminal sliding-mode observer of interior permanent magnet synchronous motor (IPMSM) is presented, of which the state variable is the current of rotor-oriented d-q reference frame, to obtain the accurate information about angular speed and rotor position for high-performance vector control system. A nonsingular terminal sliding-mode observer is used to improve dynamic response of the observer speed and robustness of the current observer, and the high-order sliding mode method is adopted to estimate the chattering phenomenon of the conventional sliding-mode. Meanwhile, to obtain the regulator parameters of speed and current loop, an integral-feedback method of estimating the rotor speed is adopted, and the inner current loop is realized using a decoupling and diagonal internal model control algorithm. Experimental results of 2 MW PMSM drive system show that the proposed method can accurately estimate the position and speed of the rotor, and the system has good dynamic and static performances.