The efficiency of induction motor drive under partial load can be improved via manipulation of its field excitation. Among the numerous efficiency optimization schemes previously proposed, the scheme that uses motor power factor as the main control variable has the advantages of high sensitivity and ease of implementation. Because the optimal power factor is a function of motor speed and is sensitive to motor parameters variations, application of the power factor scheme is severely limited. In this paper, a loss-minimization control scheme that uses power factor control for vector-controlled induction motor drives is proposed. A set of near-optimal power factor commands is generated with a fuzzy logic compensator in the commissioning of the motor drive. Then an on-line tuning controller is used to adjust the power factor command to its optimal value when the motor is at normal operations. The scheme is practical for implementation and does not require a priori knowledge of motor parameters.