An analysis of the supply and use of urban highways by functional class using the Highway Performance Monitoring System (HPMS) suggests that the potential for shifts in travel share from lower order facilities to freeways and expressways will increase as urban travel increases and urban population centers increase in size, and the greatest potential shifts will be in the suburbs of the largest urban areas. The results of an economic analysis suggest that, in general, a more optimum mix of highway facility types might be achieved by new capacity investments on freeways and expressways. On average, widening of freeways in large urban areas could be paid for by peak-period user charges ranging from 2.4 cents per vehicle mile in fringe areas to 8.9 cents per vehicle mile in the urban core. Analysis and inferences are presented that suggest that freeways/expressways have a powerful role to play in plans to expand urban highway system capacity, especially in heavily congested large urban areas, if public acceptance can be achieved. However, financing such improvements using the current tax structure, which relies heavily on motor fuel taxes, would not be equitable towards users who use the highway system during off-peak periods, when existing highway system capacity would suffice. Consequently financing mechanisms which rely on road pricing, possibly using automated vehicle identification technology, should be investigated in plans to expand urban highway systems.