A medical robotic system includes a manipulator having links that form housings which are movable by motor actuated joints. Motors for actuating the joints and sensors for sensing states of the motors are housed in one or more distal housings formed from corresponding links or other structure(s) of the manipulator. A position controller is housed in a proximal housing and provides current commands for the motors to a remote current controller that is housed in an intermediate housing and generates drive signals for the motors by using the provided current commands and sensed states of the motors.