The invention discloses a velocity estimation and friction identification method of a four-wheel turning / driving vehicle. The velocity estimation and friction identification method comprises the steps that firstly, a vehicle body coordinate system O-XY is established; secondly, a vehicle kinetic equation is established; thirdly, a wheel kinetic equation is established; fourthly, a wheel velocity equation is established; fifthly, a wheel slip rate equation is established; sixthly, the longitudinal force and lateral force of a wheel are obtained; seventhly, a friction model is parameterized; eighthly, a kinematical equation describing the relation of the vehicle velocity, the yaw velocity and the acceleration is established; ninthly, an observer is designed under the situation that detectable signals z comprise the longitudinal acceleration ax, the lateral acceleration ay, the yaw velocity r, the wheel angular velocity wj and the steering wheel rotation angle delta i; tenthly, persistent excitation conditions are defined. According to the velocity estimation and friction identification method, the nonlinearity self-adaptation observer for estimating the vehicle longitudinal velocity and the lateral velocity is established, the tire road surface friction parameters are established in real time according to the change of road surface conditions, and the velocity is estimated more accurately.