Permanent magnet synchronous motor (PMSM) drives include several design and control variables that affect power losses. The improvement in system efficiency through control techniques will reduce the size of inverter and motor cooling system as well as the operating costs of the system. This paper proposes a comprehensive analysis of loss controllability using various control parameters to reduce the motor as well as inverter losses. Power losses considered include switching and conduction losses in the inverter and fundamental and harmonic losses in the stator winding, core and rotor magnets. The inverter losses have been calculated using an analytical model as functions of DC link voltage, load current and switching frequency. A 2-D electromagnetic coupled loss model is developed for calculating the losses in a laboratory interior PMSM (IPM) for varying operating conditions. An analytical model is used to obtain a comprehensive understanding of the behavior of motor losses that were obtained from the electromagnetic model with respect to control parameters. The dependence of motor, inverter and the system level losses are tested and validated on a laboratory IPM drive system. Consequently, suggestions are made regarding selection of control variables in order to reduce system-level losses in PMSM drives.