The purpose of an engine-controlled traction control system (TCS) is to regulate engine torque in order to keep the driven wheel slip in a desired range. Engine torque can be regulated by a throttle valve. In this paper, the engine-controlled TCS based on an engine model and estimated load torque by a Luenberger observer is proposed. For this control scheme, the engine model is required for a model-based controller design using sliding mode control. The engine torque controller determines the throttle angle for maintaining the desired manifold pressure to generate engine torque corresponding to the desired wheel torque. Since the load torque is composed of multiple external sources such as friction force, drag force, mechanical losses, and others, load torque estimation is required. The simulation results to various manoeuvres during slippery and split road conditions have showed better acceleration performance and stability of the vehicle with TCS. In addition, the load torque observer has estimated real load torque with little error.