A methodology for the design of dynamical observers for hybrid plants is proposed. The hybrid observer consists of two parts: a location observer and a continuous observer. The former identifies the current location of the hybrid plant, while the latter produces an estimate of the evolution of the continuous state of the hybrid plant. A synthesis procedure is offered when a set of properties on the hybrid plant is satisfied. The synthesized hybrid observer identifies the current location of the plant after a finite number of steps and converges exponentially to the continuous state.