A methodology is presented to estimate lateral tire force dynamics. The methodology is based on EKF (extended Kalman filter) and makes it possible to determine lateral tire force dynamics on the basis of the results obtained from various on-road handling manoeuvres such as lane change, slalom, and circuit driving. A vehicle model having four degrees of freedom is used to estimate the lateral tire dynamics where the lateral tire forces are described by the Magic formula with transient behavior. Several handling tests including subjective and objective are performed. The objective data are used to extract lateral tire dynamics during handling test manoeuvres. The estimated lateral tire forces are compared with the experimental one measured from indoor Flat-trac machine. Also, the subjective ratings are compared with the estimated lateral tire characteristics such as cornering stiffness, lateral peak friction and load sensitivity. The results show good agreement between subjective rating and lateral tire dynamics, which confirm the availability of the methodology in vehicle and tire design.