Understanding the processes that underlie biodiversity requires insight into the evolutionary history of the taxa involved. Accurate estimation of speciation, extinction, and diversification rates is a prerequisite for gaining this insight. Here, we develop a stochastic birth-death model of speciation and extinction that predicts the probability distribution of both extinct and extant numbers of species in a clade. We present two estimation methods based on this model given data on the number of extinct species (from the fossil record) and extant species (from diversity assessments): a multivariate method of moments approach and a maximum-likelihood approach. We show that, except for some special cases, the two estimation methods produce very similar estimates. This is convenient, because the usually preferred maximum-likelihood approach is much more computationally demanding, so the method of moments can serve as a proxy. Furthermore, we introduce a correction for possible bias that can arise by the mere fact that we will normally only consider extant clades. We find that in some cases the bias correction affects the estimates profoundly. Finally, we show how our model can be extended to incorporate incomplete preservation. Preservation rates can, however, not be reliably estimated on the basis of numbers of extant and extinct species alone.