This paper presents a novel method for the rotor resistance identification of an indirect rotor field oriented (IRFO) control system of a saturated induction motor. A saturated induction motor is an induction motor with a variable (saturable) mutual inductance. Saturation of the mutual inductance appears in operating conditions with variable rotor flux levels in the IRFO control system of an induction motor. The rotor resistance identification is based on an inverse rotor time constant identification, which is based on the model reference adaptive system (MRAS) principle. The magnitude of the rotor flux has been estimated in the stationary reference frame by the voltage model (reference model) and by the current model (adaptive model). The error signal of the rotor flux magnitude of the two estimators is applied to drive a PI mechanism that provides a correction to the inverse rotor time constant. This paper presents an original analysis of the IRFO system stability by taking small deviations of mutual inductance and rotor resistance at a steady-state operating point. The effectiveness of the proposed method for rotor resistance identification has been verified by digital simulation and experimentation.