A nonlinear observer for estimation of the longitudinal velocity, lateral velocity, and yaw rate of a vehicle, designed for the purpose of vehicle side-slip estimation, is modified and extended in order to work for different road surface conditions. The observer relies on a road-tire friction model and is therefore sensitive to changes in the adhesion characteristics of the road surface. The friction model is parametrized with a single friction parameter, and an update law is designed. The adaptive observer is proven to be uniformly globally asymptotically stable and uniformly locally exponentially stable under a persistency-of-excitation condition and a set of technical assumptions, using results related to Matrosov's theorem. The observer is tested on recorded data from two test vehicles and shows good results on a range of road Surfaces. (C) 2007 Elsevier Ltd. All rights reserved.