This paper presents a transducerless rotor position and velocity estimation method for induction, synchronous, and reluctance machines. The method uses a high-frequency (500–2 kHz) three-phase signal injected by the inverter, followed by signal demodulation and processing with a closed-loop observer to track rotor magnetic saliencies from the machine terminals. This approach enables robust and accurate dynamic estimation across all operating points, including zero and high speeds, and various load conditions. The method is applicable to all AC machines with rotor magnetic saliency, including induction machines. The paper discusses the high-frequency rotor saliency in induction machines, showing that the stator impedance is dominated by the stator leakage reactance at high frequencies. A spatial modulation in the rotor leakage inductance can be achieved by varying the width of the rotor slot openings, creating a detectable magnetic saliency. The rotor position and velocity are estimated using a closed-loop observer with heterodyning to extract position information from stator currents. The signal demodulation process involves heterodyning the stator currents to extract a linear position error signal, which is used as input to the observer to estimate rotor position and velocity. The paper also discusses the design of machines for tracking rotor saliency, including modifications to existing machines and new machine designs that allow for spatial modulation of rotor leakage inductance. The experimental verification shows that the method is effective in detecting rotor saliency and estimating rotor position and velocity. The method is implemented in a digital system using a DSP-based indirect field oriented control system, demonstrating its viability for transducerless position and velocity estimation in induction and salient AC machines. The method is robust and accurate, with low computational and hardware requirements, and is applicable to various AC machines with rotor magnetic saliency.This paper presents a transducerless rotor position and velocity estimation method for induction, synchronous, and reluctance machines. The method uses a high-frequency (500–2 kHz) three-phase signal injected by the inverter, followed by signal demodulation and processing with a closed-loop observer to track rotor magnetic saliencies from the machine terminals. This approach enables robust and accurate dynamic estimation across all operating points, including zero and high speeds, and various load conditions. The method is applicable to all AC machines with rotor magnetic saliency, including induction machines. The paper discusses the high-frequency rotor saliency in induction machines, showing that the stator impedance is dominated by the stator leakage reactance at high frequencies. A spatial modulation in the rotor leakage inductance can be achieved by varying the width of the rotor slot openings, creating a detectable magnetic saliency. The rotor position and velocity are estimated using a closed-loop observer with heterodyning to extract position information from stator currents. The signal demodulation process involves heterodyning the stator currents to extract a linear position error signal, which is used as input to the observer to estimate rotor position and velocity. The paper also discusses the design of machines for tracking rotor saliency, including modifications to existing machines and new machine designs that allow for spatial modulation of rotor leakage inductance. The experimental verification shows that the method is effective in detecting rotor saliency and estimating rotor position and velocity. The method is implemented in a digital system using a DSP-based indirect field oriented control system, demonstrating its viability for transducerless position and velocity estimation in induction and salient AC machines. The method is robust and accurate, with low computational and hardware requirements, and is applicable to various AC machines with rotor magnetic saliency.