Abstract: The observer based interpolation control for incremental encoder pulse signal is a common low speed control scheme. However, it will produce an accumulative error within each position pulse, which will affect the accuracy and stability of vector control system. In order to mitigate the negative effect caused by error accumulation, an interpolation control algorithm based on accumulative error compensation is proposed. In the proposed method, the accumulative interpolation error of the last position pulse is used as the compensation term added into the interpolation process of current position pulse for the cancellation of accumulative error in each sampling period. Thus, the phenomenon of accumulative error being monotonic increasing is suppressed afterwards. Finally, the performance of the proposed method is tested on a 750 W permanent magnet synchronous servo motor, and the results show that it has higher control accuracy and better anti-interference to external disturbances than the traditional observer-based interpolation control strategy.