Vehicle stability control system is a new idea which can enhance the vehicle stability and handling in the emergency situation. This system requires of the yaw rate, side slip angle, and road friction in order to control the traction force and the braking force at the individual wheels. This paper proposes an observer for vehicle stability control system. This observer consisted of the state observer for vehicle motion identification and the road condition estimator for the identification of the road friction coefficient. The state observer uses 2 degree-of-freedom bicycle model with the Dugoff tire and estimates the system variables based on the Kalman filter. The road condition estimator uses the same vehicle model and identifies the tire-road friction based on the recursive least square method. Both estimators make use of each other information. We show the effectiveness and usefulness of the proposed scheme under various road conditions through a computer simulations of a fifteen degree-of-freedom vehicle model.