This paper presents a direct torque control (DTC) scheme for matrix converter driven induction motor. The proposed scheme uses the simplified carrier-based PWM scheme of matrix converter for generation of PWM voltages. The proposed DTC scheme is characterized by the advantages of simple structure, unity input power factor operation of matrix converter, minimum torque ripple, and uniform switching as with carrier based modulation. A speed sensorless closed loop speed control of the induction motor is implemented along-with the DTC scheme. The novel carrier based modulation method is used to generate the PWM voltages from the matrix converter.