In this paper, an Adaptive Input-Output Feedback Linearization technique with online simultaneous estimation of direct and quadrature axis inductances is discussed for Interior type Permanent Magnet Synchronous Motor(IPMSM). And it is designed on the basis of Maximum Torque per Ampere(MTPA) control strategy. In addition, it is also shown that the estimation errors in the motor two axis inductances converge to zero. Furthermore, a simple experimental method of obtaining the MTPA trajectory, which based on maximization of the output DC voltage in generation mode versus stator current, is considered. Simulation results confirm that the proposed method is capable of tracking the MTPA trajectory, and it can compensate the motor parameters variations.