An active motor damping system and method for dampening oscillations of a driveline in a vehicle includes generating a commanded torque indicative of an actual torque which would counteract the oscillations if delivered by a motor to the driveline. The commanded torque is adjusted as a function of a phase lag between the commanded torque and an actual torque which the motor would deliver in response to the commanded torque such that in response to the adjusted commanded torque the motor delivers the actual torque which counteracts the oscillations.