Intelligent Freeway Transportation Systems: Functional Design focuses on the efficient use of resources in the design of ITS. It discusses the principles of top down design starting with objectives and requirements, and provides guidance for the development and evaluation of functional design alternatives according to cost effectiveness principles. It shows how transportation planning principles such as Wardrop's Laws and traffic diversion principles relate to functional ITS device selections and equipment locations. Methodologies for translating objectives to functional device types are provided. Application factors to identify device deployment densities (e.g. number of detectors per mile) as a function of traffic conditions are provided, as are evaluation models for evaluating the benefits of design alternatives based on traffic conditions. Design guidance and benefits evaluation include the following functions: (1) Non-recurrent congestion - Improvement of incident clearance time, (2) Non recurrent congestion - Incident information to motorists, (3) Recurrent congestion - Information to motorists, (4) Ramp metering, (5) Motorist service patrols.