The effective application of integrated vehicle dynamics control and automatic driving require consistent vehicle state variables and parameters. Considering lateral vehicle dynamics, the yaw rate and (estimated) vehicle side-slip angle are the minimum set of state variables that can give insight into the handling characteristics of a vehicle. Various methods of vehicle side-slip angle (lateral velocity) estimation have been tested in virtual and real world applications, in particular on a horizontal dry road. Vehicle side-slip angle, however, is not only affected by the (steering) commands of the driver, and possibly by a vehicle dynamics controller, but can also arise from a banked road or result from a low-friction surface, changing tyre–road contact. The combined effects require a comprehensive estimation approach, which is less often touched upon in the literature. Based on earlier findings on important aspects of observability, the paper addresses a modular vehicle side-slip angle estimation approach that is particularly focused upon practical aspects of modelling and design. Estimation of the combined vehicle side-slip angle, road bank angle and maximum tyre–road friction coefficient has been broadly tested with a vehicle equipped with an electronic stability control (ESC) and electric power-assisted steering (EPS) sensor configuration, for various road conditions, driving situations and vehicle/tyre setups.