Traffic flow instabilities such as traffic congestion are often caused by ad hoc and inappropriate speeds and headways that humans choose when they operate their vehicles. In an automated highway system (AHS) environment, the driver’s actions are replaced by those of a computer control system that is designed to optimize traffic flow. On the microscopic level, each vehicle is driven by a computer control system, which, based on the actions of the surrounding vehicles, sends the appropriate commands to the throttle/brake/steering actuators. On the macroscopic level, a roadway controller calculates the desired speed commands to be followed by vehicles in each section of the freeway lanes in order to achieve desired traffic density distributions that lead to optimum traffic flow conditions. In this paper, we design, analyze and simulate a roadway controller for an automated highway that achieves desired traffic densities along the lane. A macroscopic traffic flow model that is modified for AHS operation is used for control design and analysis. We show that the proposed roadway controller guarantees exponential convergence of the traffic density at each section to the desired density. Simulation results are used to illustrate the effectiveness of the proposed controller and the significant benefits AHS may bring to traffic flow.