Abstract: An approach to the real-time estimation of the traffic state in motorway is developed based on unscented Kalman filtering and macroscopic stochastic traffic flow model.The motorway stretch is divided into several segments one by one with the same length and the evolution of the traffic variables are influenced by the states of the neighbor segments.Electronic sensors are usually placed between some segments and the measurements are less than states estimated.This paper uses the compact state-space method and treats the model parameters as the traffic states.Simulation results prove that unscented Kalman filter can predict and track the state efficiently.It is also more accurate than EKF method.