The real-time information of vehicle sideslip angle and tyre-road forces of individual wheels can help advanced vehicle chassis control systems to enhance vehicle handling, stability and safety. But in practice, these states are difficult to measure directly for technical and economic reasons. In order to estimate these states, this paper proposes an observer based on Extended Kalman Filter (EKF) by using a 7-DOF vehicle model. According to the Dugoff's tyre model, the lateral force can be expressed by a function of the longitudinal force with the knowledge of tyre work condition. Based on this concept, the reference vehicle model is modified to identify the lateral forces of each braked wheel without the online information of vertical load and tyre-road friction coefficient. The simulation results indicate that the longitudinal and lateral forces of each wheel can be well estimated under combined cornering and braking condition.