It is widely recognized that the iron loss produced by motors at high speeds will directly affect the angle and size of the back electromotive force, and, therefore, it cannot be ignored. In this paper, a high-performance sensorless control algorithm is proposed for high-speed permanent magnet synchronous motors (HSPMSM), taking the iron loss into account. First, the resistance representing the core loss is precalculated by finite element analysis, and then a sliding mode observer with disturbance observation is designed to estimate the rotor position. The observer possesses the advantages of suppressing the chattering phenomenon and enhancing the robustness against uncertainty. Meanwhile, the idea of the characteristic model is used to design an adaptive robust control law to improve the speed control accuracy. Subsequently, a sensorless control scheme is proposed by using the proposed observer in combination with the designed control scheme. The stability of the observer and controller is verified by the Lyapunov theory method. Finally, a simulation example is given to demonstrate the correctness and the effectiveness of the proposed algorithm.