The intelligent transportation system has generated a strong need for the development of intelligent camera systems to meet the requirements of sophisticated applications, such as electronic toll collection (ETC), traffic violation detection and automatic parking lot control. In order to achieve the highest levels of accuracy in detection, these cameras must have high speed electronic shutters, high resolution, high frame rate, and communication capabilities. A progressive scan interline transfer CCD camera, with its high speed electronic shutter and resolution capabilities, provides the basic functions to meet the requirements of a traffic camera system. Unlike most industrial video imaging applications, traffic cameras must deal with harsh environmental conditions and an extremely wide range of light. Optical character recognition is a critical function of a modern traffic camera system, with detection and accuracy heavily dependent on the camera function. In order to operate under demanding conditions, communication and functional optimization is implemented to control cameras from a roadside computer. The camera operates with a shutter speed faster than 1/2000 sec. to capture highway traffic both day and night. Consequently camera gain, pedestal level, shutter speed and gamma functions are controlled by a look-up table containing various parameters based on environmental conditions, particularly lighting. Lighting conditions are studied carefully, to focus only on the critical license plate surface. A unique light sensor permits accurate reading under a variety of conditions, such as a sunny day, evening, twilight, storms, etc. These camera systems are being deployed successfully in major ETC projects throughout the world.