A novel fuzzy logic controller and a fuzzy logic parameter regulator are presented in this paper for the design and implementation of a fully‐digitized speed control system of an induction motor. The former is used in tuning the proportional‐integral controller so as to yield quick response and small steady state error. The latter is used for on‐line determination of rotor time constant of induction motor under indirect field orientation so as to yield accurate speed response and avoid degrading system performance by temperature variation. A 16‐bit single‐chip microprocessor is used for reducing the number of circuit components for cost reduction and reliability enhancement. The proposed system is confirmed by both computer simulation and experimental results as having a faster response and smaller torque fluctuation than those of the system using conventional controller with a fixed rotor time constant. Aside from high performance, easy implementation via a microprocessor is identified as being yet another distinguishable feature of the system realized.