Nonlinear observers for estimation of lateral and longitudinal velocity of automotive vehicles are proposed. The observers are based on a sensor suite that is standard in many new cars, consisting of acceleration and yaw rate measurements in addition to wheel speed and steering angle measurements. Two approaches are considered: first, a modular approach where the estimated longitudinal velocity is used as input to the observer for lateral velocity, and second, a combined approach where all states are estimated in the same observer. Both approaches use a tire-road friction model, which is assumed to be known. It is also assumed that the road is flat. Stability of the observers is proven in the form of input-to-state stability of the observer error dynamics, under a structural assumption on the friction model. The assumption on the friction model is discussed in detail, and the observers are validated on experimental data from cars. (c) 2006 Elsevier Ltd. All rights reserved.