In this paper,the concept of environmental capacity is developed to identify a convenient maximum traffic volume which will not reduce the life quality of residents.The presented method investigates the idea of traffic capacity under environmental constraints by calculating the maximum number of vehicles allowed on roads based on acceptable levels of air and noise pollutants.In this study,the permissible noise pollution level and permissible levels of CO and NOx pollution are considered for determining environmental capacity.Results show the significant difference between environmental capacity and functional traffic capacity,introduced by the highway capacity manual (HCM) as a con-ventional method for estimating functional capacity.Thus,maximum allowed pollution is considered a constraint on a vehicle flow rate,which shows the proper traffic flow for selected streets in Tehran,Iran\'s capital.The paper concludes that traffic capacity under noise and air pollution constraints is much less (approximately one-fourth and one-eighth for noise and air pollution respectively) than the current highway capacity estimated using HCM guidelines.Therefore,to save the cities like Tehran from noise and air pollution,traffic flows should be limited to the level of environmental capacity by implementing some travel demand management (TDM) policies like road pricing.