The current scarcity of road budgets compared with the significantly higher needs of the Russian road network requires that road administrations improve their management efficiency and effectiveness. Administration effectiveness in general and cost savings in particular are two key issues addressed. Since 1993 the Russian Federal Highway Department (FHD) has embarked on a reform program aimed at separating the functions of road authorities (owner) from those of execution of road works (contractor). What were previously road construction units are being transformed into contractors with management independent from the road authorities. FHD has launched, with the assistance of the World Bank, a large program of road rehabilitation and has opened this field of activity to new contractors working alone or in joint operation with foreign contractors. Many changes have recently occurred in the Russian road management organization. Russian road management at both the federal and regional levels is reviewed, some current problems are explored, and possible improvements are suggested. The main focus is on three aspects of road management: adequate organization of state road-sector functions, which consist of putting in place the systems and procedures for planning, budgeting, designing, and supervising road works; development of an efficient road and bridge construction industry; and establishment of an efficient competitive environment.