A system and method for actively damping driveline oscillations in a motor vehicle having a traction motor to drive a vehicle's drive wheels and an antilock brake system (ABS). A traction motor controller controls a torque output signal of the motor to effectively to dampen driveline oscillations during an ABS operation. A proportional, a proportional derivative, or a derivative controller may be used to generate the torque output signal based on at least one of motor speed, an average of the drive wheel speeds, a difference in the two speeds, a motor angular acceleration, an average wheel angular acceleration, and a difference in the angular accelerations. Motor speed signals and average drive wheel speed signals may be filtered to eliminate high frequency components of each speed signal. Additionally, amplitude of the torque output signal may be limited within a positive upper and a negative lower active motor damping limit.