AWD system transfers some portion of engine torque from the main drive shaft to the sub drive shaft. Recently, electronic motor actuated type AWD system has been emerged to control the vehicle more actively. Compared with a mechanical type AWD, electronic type AWD enables the variable torque distribution toward the sub drive shaft with the wet clutch friction material. This paper proposes the clutch torque estimation method of the electronic type transfer case. To compensate the uncertainty of clutch parameters, vehicle dynamics model is integrated in the torque estimator to utilize vehicle information with the sensor signal which is obtained from the vehicle can. By implementing carsim based simulation environment setup of AWD system, torque estimation is validated with several driving conditions.