A study was undertaken to investigate (a) the effect of rubber concentration and rubber particle size on properties of asphalt cement,(b) the effect of rubber concentration and rubber particle size on properties of asphaltic concrete mixtures, and (c) the effect of rubber on water sensitivity of asphaltic concrete mixtures. Three types of materials were used: one type of rubber obtained by chopping the tread peel from scrap truck tires, one type of asphalt cement with a penetration grade of 80 to 100, and one type of crushed limestone aggregate. Four concentrations of rubber (5, 10, 15, and 20% by total weight of asphalt-rubber mixes) and three rubber particle sizes (Nos. 16-20, Nos. 20-50, and Nos. 50-200) were also used. Results indicated that penetration, ductility, flash point, and specific gravity were inversely related to the increase of rubber concentration in the binder, whereas the softening point was directly related to the increase of rubber concentration in the binder. Results show that asphalt-rubber concrete mixtures have lower stability and higher flow than do asphaltic concrete mixtures without rubber. The experiments also indicated that retained stability of all asphaltic concrete mixtures was acceptable, except for the retained stability of the mixture with rubber particle sizes of No. 50-200 at a 20% rubber concentration.