A full order observer is designed for a class of nonlinear systems that can potentially admit unstable zero dynamics. The structure of the observer is composed of an Extended High Gain Observer (EHGO), for the estimation of the derivatives of the output, augmented with an Extended Kalman Filter (EKF) for the estimation of the states of the internal dynamics. The EHGO is also utilized to estimate a signal that is used as a virtual output to an auxiliary system comprised of the internal dynamics. In the special case of the system being linear in the states of the internal dynamics, we achieve semi-global asymptotic convergence of the estimation error. We demonstrate the efficacy of the observer in two examples; namely, a synchronous generator connected to an infinite bus and a Translating Oscillator with a Rotating Actuator (TORA) system. (C) 2013 Elsevier Ltd. All rights reserved.