The development of an in-situ efficiency estimation technique is a challenging task where the lowest level of intrusion and the highest possible accuracy is required. In this paper a new algorithm is discussed for in-situ efficiency estimation of induction machines under unbalanced power supplies. Prior work in literature has concentrated on balanced supplies. In addition, to have a non-intrusive speed measurement, a specific adaptive nonlinear algorithm is applied for extraction of the speed dependent current harmonics from the measured current signal. A similar algorithm is used to extract the symmetrical components from the current and voltage signals to handle the unbalanced supply conditions. Experimental results with two different machines are used to prove the effectiveness and generality of the proposed method. Measurement error analysis as well as repeatability tests have been done to determine the credibility of the proposed method.