Dhaka, capital of Bangladesh, is the most densely populated city in the whole world. More than twelve million people live in Dhaka city. Day by day the number is increasing and most part of Dhaka is badly affected by huge traffic jam. Faulty traffic signaling systems, inadequate manpower, narrow road spaces and overtaking tendency of drivers create pro-longed traffic congestions. Due to traffic jam a substantial portion of working hours have to be left on streets which indirectly put adverse impact on economy. It causes serious air pollution and noise pollution and thus worsens the overall environmental condition. To reduce traffic jam, government can consider construction of roads through east-west connection of Dhaka city, construction of circular embankment-cum-road along the periphery of Dhaka city, grade separated road network system, bus Rapid Transit (BRT) system, and Metro-Rail system. By reducing traffic jam, this city can play a very important role by ensuring healthy environment free from noise and pollution.