The purpose of this research is to develop methodologies for applying traffic flow theories to various ITS categories through the utilization of evolving surveillance technologies. This integration of theory, measurement and application has been overlooked since the advent of ITS because of the number of disciplines involved. In this context, the following illustrative methodologies are selected, developed and presented in this study: - a methodology for automatic measurement of major spatial traffic variables for the present and the future implementation of various ITS functional areas, in general; and - a methodology for real-time link and incident specific freeway diversion in conjunction with freeway incident management, in particular. The first methodology includes the development of a dynamic flow model based on stochastic queuing theory and the principle of conservation of vehicles. An inductive modeling approach adapted here utilizes geometric interpretations of cumulative arrival-departure diagrams which have been drawn directly from surveillance data. The advantages of this model are real-time applicability and transportability as well as ease of use. Analysis results show that the estimates are in qualitative and quantitative agreement with the empirical data measured at 30-second intervals. The analytical expression for link travel times satisfies traffic dynamics where the new form of the equation of conservation of vehicles has been derived. This methodology has potential applicable to automatic traffic control and automatic incident detection. The methodology is then applied to freeway diversion in real-time in conjunction with freeway incident management. The proposed new form of the equation of conservation of vehicles is applied to detect recurring or non-recurring congestion analytically. The principle of conservation of vehicles is applied to develop the concept of progression and retrogression of incident domain, which turns out to be compatible with traditional shock wave traffic mechanism during incidents. The link and incident specific diversion methodology is achieved by using a delay diagram and volume-travel time curves, which can be plotted per link per incident. The use of such graphic aids makes problem solving much easier and clearer. The dynamic traffic flow model developed here can also be applied to estimate travel times during incidents as a function of time. The development of a computer program for freeway diversion concludes this research. / Ph. D.