Accurate current signals are required for precise current control of AC motor drives. However, current measurement error including the metering error and the quantization error is unavoidable due to the inaccuracy of current sensors and the quantizing feature of analog-to-digital converters. In this paper, the combination of dithering techniques and Kalman filter is presented to suppress the current quantization effects caused by A/D converters. Firstly, the dithering system is designed to whiten the total current measurement error. Then, Kalman filter is exploited to estimate the real current signals from the whitened noise. The effectiveness of the proposed approach is verified via simulations and experiments using a high-precision stage.