For a field-oriented high-power induction motor drive, the observers are used to calculate speed, rotor flux phase and amplitude, electromagnetic and load torque observation and control and for diagnostic purposes. The observers of speed, rotor flux phase and amplitude are designed based on the model reference adaptive system, which has simple structure but extreme precision. A load torque observer is planned by employing the speed and electromagnetic observers, which well estimates the actual load torque. A diagnostic system is proposed to send an alarm to the maintenance center during the fault occurrence by independently comparing the observed and the actual or the previously recorded values of the load torque and speed. In addition, the drive control can be switched automatically to sensorless mode during the system operation, as a speed sensor fault occurs. Generally, the application of the observers and diagnostic system increases the drive reliability and safety. The performances of the drive, observers and diagnostic system are verified through simulations accomplished on a 150-kW induction motor drive.