The servo system of a permanent magnet (PM) motor should always maintain fine torque and fine speed responses. Accurate motor parameter identification is necessary for the PM motor servo system because the current control system is designed by considering the electric parameters of the PM motor. However, the motor parameters vary with the age of the motor and temperature. Moreover, current sensors have offset values. When the current sensor has offset values, the PM motor servo system produces torque ripple. In order to overcome these problems, this paper proposes a new real-time estimation method for both current sensor offsets and electrical parameters (resistance Ra, inductance La, and magnetic flux φfa) of the surface permanent magnet (SPM) motor. The proposed method involves the use of a real-time algorithm and a current simulator, which is operated using a DSP software system. In order to accurately estimate the motor parametera, the proposed method is using estimate currents, DC terms of sensor currents, and nominal motor parameter value. The experimental results of this study confirm that the proposed method satisfactorily estimates the current sensor offset of the U phase and V phase, as well as the electrical motor parametersRa, La, and φfa accurately.