Although friction force measurements using one sensor to detect both the normal deflection and rotation angle of a scanning probe are convenient and popular, the critical issues regarding the calibration of the instruments have not been fully studied. A Lateral Force Microscope (LFM), modified from the Point Contact Microscope (PCM), is used to simultaneously measure the surface topography and friction force. An optical head is used to measure the normal bending deflection and rotation angle of the cantilever that carries the diamond tip. Emphasis is put on the development of reliable calibration procedures for obtaining the normal deflection and rotation sensitivities of the optical head as well as the spring constants in the bending and torsion modes. The friction loop, which is essential for friction measurements, is investigated in detail. The LFM is used to measure a two-phase composite to show its ability to distinguish different materials on a surface. Wear tests on a single-crystal silicon <100> surface show different friction coefficient regimes, depending on the applied load. For small loads, there is no wear and the friction coefficient is constant. For larger loads, the friction coefficient and wear depth increase with normal load.