This paper presents a new attractive approach for a vector control system of AC machine by state space method. First state equations of an induction machine suitable for the current control are derived. It becomes clear that the induction machine can be described as three input-three output controlled object. New vector control theory is formed and developed based on an optimal regulator technique. The proposed control system have excellent characteristics for changes in the desired signal and disturbance signal, and in spite of parameter variations of the controlled object. Several simulation results are presented.