Considering some technical and economic reasons, it is not easy to directly measure the vehicular moving parameters (such as tyre–road forces and vehicle sideslip angle) in electronic stability programme systems. This study proposes a method to estimate lateral tyre–road forces and vehicle sideslip angle by utilising real‐time measurements, based on the unscented Kalman filter. Direct‐yaw‐moment control can effectively guarantee the stability of vehicle while steering at a high speed. This study proposed a hierarchical control strategy as the solution to the problem of the yaw‐moment distribution. The overloop controller is designed to calculate the desired yaw moment based on the estimated lateral tyre–road forces and sideslip angle, using the sliding mode control. The servo‐loop controller is designed to optimise the torque distribution using weighted‐least‐squares method based on the desired yaw moment obtained from the overloop controller. MATLAB/Simulink with Carsim is applied for the simulation experiment, the results demonstrate the effectiveness of the lateral tyre–road force and sideslip angle observer, and the optimal allocation controller could improve the handling stability and energy efficiency dramatically.