This paper presents a new and simple method for sensorless control of matrix converter drives using a power flowing to the motor. The proposed control algorithm is based on controlling the instantaneous real and imaginary powers into the induction motor. To improve low-speed sensorless performance, the nonlinearities of a matrix converter drive such as commutation delays, turn-ON and turn-OFF times of switching devices, and ON-state switching device voltage drop are modeled using a PQ power transformation and compensated using a reference power control scheme. The proposed sensorless control method is applied for the induction motor drive using a 3 kW matrix converter system. Experimental results are shown to illustrate the feasibility of the proposed strategy.