The Republic of Croatia is on its way to becoming a member of the European Union. The precondition put before Croatia, is the harmonization of its legislation with the acquis communautaire, which also applies to traffic policy and the traffic system. Although Croatia has adopted a number of strategic documents regulating traffic and traffic subsystems, it still does not have a unique document on traffic policy. Studies have shown that, in the past decades, the traffic policy has been marked by inconsistency, unequal treatment of traffic systems, favouring road transport in relation to other branches, inequality of investment in transport sectors etc. Therefore, this dissertation explores the theoretical features of traffic policy, the concept, importance, types, objectives and instruments of the traffic policy, its principles and effects in order to determine the scientific grounds on which the traffic policy is to be developed, and to indicate to the interrelationship of the Croatian and the European traffic policy. Analysing traffic policy is not possible without previous knowledge and understanding of the basic features of the traffic system. Traffic is a complex, dynamic system composed of many subsystems that are differently structured and have different features (technical, technological, organizational, legal, economic ...). Therefore, it is especially important to be aware of and to know the elements of the modern traffic industries which impact the development and operation of all processes and activities within the traffic systems, and thus affect the realizations oftraffic policy objectives. The traffic industry of Croatia is analyzed by individual segments: traffic infrastructure, traffic superstructure, traffic intellectual capital, information technologies, gross domestic product, traffic law compliance to European requirements and other elements that affect the growth and development of the traffic industry as a whole. The achieved results were necessary in order to analyse and assess the degree of development of the traffic system in the Republic ofCroatia. The analysis and assessment of the degree of the development of the traffic system in the Republic of Croatia have shown that the traffic system is still not sufficiently developed and that it is not competitive in relation to the traffic systems of developed European countries. However, there are numerous advantages which put it in a better position in relation to the neighbouring countries, as well as some other European countries. Moreover, studies have shown that the Croatian traffic system could be of great significance for the overall European and global traffic and economic system. A number of documents planning development, modernization and investments show that a lot of work has been done on the modernization of the traffic system. However, most of these documents, along with the detailed analysis of passenger and cargo turnover, do not have clearly defined objectives, timeline, and holders who would be responsible for the growth and development of a sustainable traffic system in Croatia. Therefore, based on the research on the traffic policy in VII general, the traffic system and elements of the Croatian traffic industry, as well as the interrelationship between traffic policy and the modernization of the traffic system in the Republic of Croatia, the author proposes model for modernizing the Croatian traffic industry founded on the European Union traffic policy. Furthermore, the author proposes a model of traffic policy with the aim of modernizing the Croatian traffic system (2010-2030). Moreover, the models have indicated that traffic industry and traffic policy elements should reach certain values over a longer period of time in order for the traffic system to become more involved in the European economic and traffic flows. In addition, the analyses have shown which elements of the traffic industry should be given more emphasis when defining the traffic policy, as they directly affect the overall traffic industry of Croatia. The model was tested by conducting a survey that has confirmed the results of the proposed models. All research confirms the hypothesis that the Republic of Croatia needs a new document on traffic policy which will be a conditio sine qua non of modernization, sustainable growth and development of the traffic system in the Republic of Croatia.