This paper proposes a current-error space-vector-based hysteresis controller with online computation of boundary for two-level inverter-fed induction motor (IM) drives. The proposed hysteresis controller has got all advantages of conventional current-error space-vector-based hysteresis controllers like quick transient response, simplicity, adjacent voltage vector switching, etc. Major advantage of the proposed controller-based voltage-source-inverters-fed drive is that phase voltage frequency spectrum produced is exactly similar to that of a constant switching frequency space-vector pulsewidth modulated (SVPWM) inverter. In this proposed hysteresis controller, stator voltages along α-and β-axes are estimated during zero and active voltage vector periods using current errors along α-and β-axes and steady-state model of IM. Online computation of hysteresis boundary is carried out using estimated stator voltages in the proposed hysteresis controller. The proposed scheme is simple and capable of taking inverter upto six-step-mode operation, if demanded by drive system. The proposed hysteresis-controller-based inverter-fed drive scheme is experimentally verified. The steady state and transient performance of the proposed scheme is extensively tested. The experimental results are giving constant frequency spectrum for phase voltage similar to that of constant frequency SVPWM inverter-fed drive. © 2011 IEEE.