This paper presents a fresh approach to the design of state observers for a class of time-delay systems with one time delay in the state and output vectors. By proposing a new coordinate state transformation, the system is first transformed into the new coordinates where all the delay terms associated with the state variables are injected into the system’s output and input. Thus, in the new coordinate system, a Luenberger-type state observer can be easily designed. Then, a backward state transformation problem is studied which allows us to reconstruct the original state vector of the system. Conditions for the existence of the state transformations and an algorithm for computing them are provided in this paper. We show that our approach works for a wider class of time-delay systems in the sense that when some existing state observer design methods fail to reconstruct the state vector, the proposed new change of coordinates and the observer scheme in this paper can still reconstruct the original state vector. Numerical examples and simulation results are given to illustrative the effectiveness of the proposed design approach.