On-site efficiency determination of induction motor is essential in industrial plants for saving the energy consumption. This paper presents a new application of particle swarm optimization (PSO) approach for field efficiency evaluation of induction motor based on a modified induction motor equivalent circuit. The stray-load loss is considered in the equivalent circuit by adding an equivalent resistor in series with the rotor circuit and its value is derived from the assumed stray-load loss recommended in IEEE Std. 112. The PSO approach uses the information about the stator current, stator voltage, input power, stator resistance and speed of the motor and determines the equivalent circuit parameters. Once these parameters are known, the efficiency of motor can be evaluated. The simulation results on a 3.75 kW motor are presented and compared with the results of torque gauge method (TGM), equivalent circuit method (ECM), slip method (SM), current method (CM) and segregated loss method (SLM). The results reveal that the proposed method can evaluate the efficiencies of motor with less than 3% error under normal load conditions. Consequently, the method can be used in motor energy management system for improving the overall energy savings in industry. (C) 2011 Elsevier Ltd. All rights reserved.