New engine control strategies, designed for drive-by-wire systems, will require the measurement (or the estimation) of several operative engine parameters in order to control emissions and efficiency, while satisfying the driver demand in terms of driveability and performance.Both load and indicated torque (i.e. the torque due to the gas pressure acting on the pistons) will play an essential role in this context, since the driver pedal command may be appropriately interpreted by the Electronic Control Unit (ECU) in terms of an engine (or load) torque request. In fact, the accelerator pedal variation forces the vehicle to reach a final steady-state condition, corresponding to a new level of engine and load torques, thus making it possible to assume the existence of a direct link between the pedal position and the “desired” final engine (or load) torque.In this field, many research groups have recently developed methodologies aimed at the estimation of these parameters, since their measurement is at present not available on board the vehicle.In this paper we present a signal processing procedure to estimate the indicated torque, via Frequency Response Functions (FRF), and the load torque, by means of a nonlinear model-based observer. Two important aspect of this approach should be stressed: the possibility of estimating the instantaneous values of the indicated torque, which may prove useful for diagnostic applications, and the use of a single signal already available to the powertrain control module (the instantaneous flywheel velocity), to perform both indicated and load torque estimation.The feasibility of the proposed approach has been analyzed in an engine test cell, using a four-cylinder in-line production engine connected to an eddy current brake. Some experimental results are presented at the end of the paper, showing a good agreement between measured and estimated signals.