The stability of a buried magnet type of permanent magnet synchronous motor, when operated in a variable speed drive under open loop control, is discussed. The performance of the drive when the permanent magnet machine is constrained to operate at constant power factor is investigated. The stability of the drive is examined using analytical models which describe both the inverter and the permanent magnet machine. The model used for the permanent magnet machine includes the effect of core loss and has variable parameters to account for the changing levels of saturation present in the machine during normal operation. The analysis indicates that the drive can become unstable if the permanent magnet motor is operated at leading power factors in an open loop. These observations are in agreement with the stability boundaries found from tests. Stable operation can be achieved over the full working range of the drive by operating the machine at fixed lagging power factor. The implementation of this power factor control is described.