The ability to sustain a smooth-running practice is very important in dentistry. Because of this reason, Electric handpieces driven by permanent magnetic synchronous motors (PMSMs) have been increasingly applied in dentistry and have replaced air-driven ones due to their high efficiency and ability to sustain constant speed while operating. Additionally, they produce little noise compared to the high pitched whine of their air-driven counterparts. As is well known, the rotor position is the necessary information for driving a PMSM. Unfortunately, a dental handpiece requires repeated heat sterilization that will break down the Hall sensors, and further, lacks the space to install an incremental encoder. Therefore, sensorless speed control of a PMSM is the key technology for an electric dental handpiece. In this paper, a sliding mode observer is used to implement an electric dental handpiece. Moreover, a prototype of the electric handpiece system has been designed and built. Experimental results are presented to verify the feasibility.