In this study, state observation in positioning systems is discussed. A dynamical friction model, also called an elastoplastic model, describing basic friction phenomena such as stick-slip dynamics, presliding motion, the Stribeck effect, etc., is included in the positioning system model. A Luenberger-type state observer is presented and developed for motion control systems with the non-linear elastoplastic friction model in order to overcome difficulties in measuring internal states physically. Since the parameters of the elastoplastic friction model are required in the experimental studies, a combined parameter identification method is also outlined in three different levels. Simulation and experimental results are presented to illustrate benefits of the method by observing both velocity and friction states. The proposed method is tested successfully on an electromechanical positioning system.