the popularity of renewable energy has experienced significant growth recently due to the foreseeable exhaustion of conventional fossil fuel power generation methods and increasing realization of the adverse effects that conventional fossil fuel power generation has on the environment. among the renewable energy sources, wind power generation is rapidly becoming competitive with conventional fossil fuel sources. the wind turbines in the market have a variety of innovative concepts, with proven technology for both generators and power electronics interfaces. recently, variable-speed permanent magnet synchronous generator (pmsg) based wind energy conversion systems (wecs) is becoming more attractive in comparison to the fixed-speed wecs. in the variable-speed generation system, the wind turbine can be operated at maximum power operating points over a wide speed range by adjusting the shaft speed optimally. this thesis presents both wind and rotor speed sensorless control for the direct-drive interior permanent magnet synchronous generator (ipmsg) with maximum power point tracking (mppt) algorithm. the proposed method, without requiring the knowledge of wind speed, air density or turbine parameters, generates optimum speed command for speed control loop of vector controlled machine side converter. the mppt algorithm based on perturbation and observation uses only estimated active power as its input to track peak output power points in accordance with wind speed change and incorporates proposed sensorless control to transfer maximum dc-link power from generator. in this work for the ipmsg, the rotor position and speed are estimated based on model reference adaptive system. additionally, it incorporates flux weakening controller (fwc) for wide operating speed range at various wind speed and other disturbances. matlab/simulink based simulation model of the proposed sensorless mppt control of ipmsg based wecs is built to verify the effectiveness of the system. the mppt controller has been tested for variable wind speed conditions. the performance of the proposed wecs is also compared with the conventional control of wecs system. the proposed ipmsg based wecs incorporating the mppt and sensorless algorithms is successfully implemented in real-time using the digital signal processor (dsp) board ds1104 for a laboratory 5 hp machine. a 5 hp dc motor is used as wind turbine to drive the ipmsg. the speed tracking performance and maximum power transfer capability of the proposed wecs are verified by both simulation and experimental results at different speed conditions.