Decoupling the stator current into magnetizing current and torque current, the vector control technique improves the performance of AC drive system effectively. However, the rotor time constant varies widely with rotor temperature and the flux level of the machine, which decreases the quality of the drive system. By the contrastive analysis of the variable current on-line estimation methods, this paper uses the Model Reference Adaptive System (MRAS) and designs a set of self-adaption estimation arithmetic which has its basis on the Lyapunov theorem of stability. The simulation shows that the estimation arithmetic has the characteristics of fast convergence speed, few stability errors, good track performance and etc. On the basis of simulation of the rotor time constant on-line estimation, this paper designs the system of vector control with the rotor time constant on-line estimation and has the simulation. According to the simulation results, applying the estimation to the vector control system can improve the performance of the system effectively and establish the theoretical basis of the research on the high-performance AC drive system.