This paper deals with the method to estimate the friction in a system. We study a nonlinear friction model to estimate the friction in an inverted pendulum and approximate the friction model using fuzzy basis functions expansion. To demonstrate the friction observer using FBFs, we derive a update rule based on the error term that is formed by the output from a real system and observer output with a friction estimate. And two compensation algorithms to improve the response of an inverted pendulum are proposed. The first method that a observer parameter is updated in on-line and the friction is compensated at the same time. The second method is to compensate the friction with observer parameter estimated priori. The two methods is compared through the experimental results.