This paper describes simplified burnt gas fraction estimation method for turbocharged diesel engine with dual loop exhaust gas recirculation (EGR) system. According to the strengthening emission gas regulation in diesel engine, burnt gas fraction has become principal factor for diesel engine air path system. Previous burnt gas fraction estimation method was valid only for a few operating point because of many assumptions used to prove the observability. Or it limits the condition which is not appropriate for practical use. By introducing a simplified burnt gas fraction dynamics, observability can be proved only with a single assumption. Asymptotic stability of the burnt gas fraction observer was proved by Lyapunov analysis. The observer was validated on a 6L heavy duty diesel engine GT-POWER model with various engine operating points.