High-performance industrial drive systems utilize Permanent MagnetSynchronous Motors (PMSMs) due to their high power density, quickdynamic reaction, and outstanding efficiency. However, the dynamic andsteady-state performance of the drive system is impacted by conventionalModel Predictive Direct Speed control (MPDSC) schemes, which are verysusceptible to parameter mismatch, load disturbance, and model uncertainty.This work proposes a new MPDSC technique with an adaptive Sliding-ModeObserver (SMO) for the position and speed management of a PMSM in orderto address the aforementioned issues. After deriving a mathematical model ofthe PMSM in the synchronous (d)-(q) coordinate frame, an MPDSC approachcentered on the finite control set predictive control principle is put forward.The suggested observer minimizes chattering while ensuring resilience andaccurate disturbance assessment by adjusting the sliding mode coefficientsusing an adaptive approach. In MATLAB/Simulink, the efficacy of thesuggested approach is confirmed under various operating situations, includingfluctuating load torque and speed. The simulation findings display that theenhanced MPDSC method outperforms the conventional MPDSC strategy interms of dynamic response, including reduced overshooting, quicker settlingreaction, reduced speed error, and superior current quality performance. Forinstance, at the operating conditions utilized in the testing, the settling timewas reduced from around 40ms to 38ms, and the total harmonic distortion(THD) of the stator current was diminished from 13.95% to 2.41%.Furthermore, the suggested observer-based compensation technique mayenhance the robustness of the PMSM and efficiently suppress factordisturbances. The obtained findings confirm that the suggested adaptiveobserver-assisted MPDSC method is a practical and computationallyeconomical way to improve PMSM's dynamic performance and disturbancerejection capabilities.